I mentioned lifestyle creep a couple days ago and someone asked me to explain, so here goes:
As we make more money, our chosen lifestyle becomes more expensive – it creeps up on us and, if we’re not paying attention, it consumes all the “extra” money we thought we’d have, when we started making more. We tend to buy nicer clothes, buy a more expensive car, move to a more expensive apartment or buy a bigger home. It could be on a much smaller scale too – we go out to eat more, we pay more for convenience, we go to concerts or other events more.
In a nutshell, lifestyle creep is what happens when we’re not paying attention. Our lifestyles creep up to meet our higher income. When this happens, we can never get ahead.
That’s why more money is not the answer to our financial problems. No matter how much money you make, it will never be enough, if you’re not intentional with it. If it were, lottery winners wouldn’t go broke. It’s not the money, it’s the decisions you make with the money.
That’s why a budget is a beautiful thing – it gives you the space to plan for your day to day income and expenses, but it can go as far beyond that as you let it! You can create a specific plan for what to do with any “extra” money that comes your way.
You can also make a plan for any permanent raise in income you encounter. This assures that your money will be spent the way you really want, instead of it just flowing through your hands, before you ever realize what’s happening.
So use your budget to avoid lifestyle creep, and you’ll be amazed how much “extra” money you find for your goals!
Want help getting started? Schedule a free budget consultation with me!