Beware Of The Lifestyle Creep

May 17, 2018

Dreamstime

Getting a raise or landing a new job that pay more than your old one can be an exciting experience. While you'll have more disposable income and more financial stability, it is important for you avoid the lifestyle creep, where what used to be luxuries are now necessities. There’s nothing wrong with rewarding yourself with nice things like a vacation, a new car or a bigger house. The problem occurs when extra income sparks the urge for a higher standard of living. Lifestyle creep is gradual as an increase in spending can become a habit and one you may not even notice for a while. By the time you realize it you may be living well above your means with only meager savings to show for years of work. So to prevent the uncontrolled lifestyle creep, work on controlling it now by planning out your financial goals. If it's owning a house, retiring early or starting a family, set out your goals and with new found income, pay towards those goals first. Stick to that plan. Decide on an amount you want to put away each month and have it automatically deducted from each paycheck. That way you won’t feel it. Some people also contribute regularly to an emergency fund. By always paying yourself first for the future, you ensure you won’t spend it all now. 

SOURCE: Mother Nature Network

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