Lifestyle Inflation

When you start to earn more, it’s easy to increase your spending and think of ways to blow your money. While you may have the right for these upgrades, keep your financial foundations intact to prevent lifestyle inflation.

Live with Your Old Budget

Even if you now earn 50% more than before, if there’s no special reason to upgrade your lifestyle or increase your expenses (having a baby, getting married, relocating etc), keep and live with your old budget. That will give you more money left to save and invest.

Know Your Goals, Set your Priorities

Right now, you might be able to afford a new car or nicer home. But if your priority is to kill all your other debts first, set your sights to it. Don’t jeopardize your goals with the allure of glamorized living.

Know How to be Content and Happy

Acquiring more money doesn’t always equate more happiness. More money may mean more opportunities and experiences, but if these don’t add value and meaning to your life, you will never be truly happy. A simple backyard picnic can bring you happiness more than a fancy restaurant dinner. Know where your happiness lie and invest on it.

Lifestyle inflation has a way of bringing you down instead of raising you up. Educate yourself about your finances and determine what brings joy and value to your life. The more you are in control of your money, the more you’ll be able to manage your income no matter where you are at life.