Taming Lifestyle Creep (Article)
Taming Lifestyle Creep
You just found out you got a promotion or maybe you just got a raise. It’s exciting because with this extra income you will be able to accomplish more of your life and financial goals. Six months later, nothing has changed, and you feel like you didn’t even get a raise. Sound familiar? I hope not, but if so, this is what’s known as “lifestyle creep.” It happens and should even be expected (you should be able to enjoy it right?). However if you find that you aren’t accomplishing what you wanted to, here are a couple of things you can do to help stop lifestyle creep.
With all income you can either spend, save or gift it. If your original plan for this new income was to invest it, the fix can be as simple as just increasing contributions to your employer plan or other investment accounts. Payroll deduction or automatic allotments from a checking account make sure you put the money to work before you spend it. Similarly, if you want to work on debt, use autopay so that the debt payments are made automatically right when you get paid. Again, put it to work before you find a way to spend it.
In the end, if you’re having a hard time following through with big plans for your new income, try to automate the allocation of this new income so that it doesn’t just become more lifestyle spending that slows down your long term goals.
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