Because the cost of living is set by what other people spend. If I earn $3k a month and my neighbor earns $3k a month, and I want to save $300, I only have $270

Because the cost of living is set by what other people spend. If I earn $3k a month and my neighbor earns $3k a month, and I want to save $300, I only have $2700 to spend. My neighbor can offer more for limited resources (housing), and thus I can only save if I don't have to pay for that housing.