Lifestyle creep, otherwise known as “lifestyle inflation,” is when higher income leads to uninhibited spending. Simply put, the more you make, the more you spend on stuff you may not need.
Transcript
When you’ve worked hard to get where you are, it’s natural to celebrate with a little splurging – after all, you’ve earned it!
But when splurges turn into regular spending habits, luxuries start to feel like necessities and before you know it, you’re overspending. Lifestyle creep, otherwise known as “lifestyle inflation,” is when higher income leads to uninhibited spending. Simply put, the more you make, the more you spend on stuff you may not need.
To keep lifestyle creep from bulldozing your budget, aim to strike a balance between fun and financial goals. As your income increases, add luxuries deliberately and slowly, rather than piling them up and having to scale back later.
Make sure your daily spending lines up with your financial goals and vision for your future. Set a budget that’ll help you achieve those goals, expand your lifestyle slowly, and resist the urge to keep up with the Joneses… and don’t forget to treat yourself along the way!
