Quite often, as soon as people start to earn more money they find a way to spend it. They upgrade from an Audi to a Bentley or move from their townhouse to a more expensive pile in the suburbs or they stop shopping on the high street and go for designer clothes. This might seem okay because after all, they are earning more, and there certainly is nothing wrong with treating yourself to nice things, however too much “lifestyle inflation” can lead to a slippery slope that ends in debt.
If you want to have a great lifestyle without the inflation, here are a few things you can do to keep costs acceptable:
If you want to beat lifestyle inflation, then you need to be aware of it. If you’re earning new money, even if you’re spending a lot more, the amount of money left in your account might not be too different. That’s why it’s a good idea to review all of your purchases each month. A few extravagances are fine, but if you’re spending money just because you can, it might be time to make a change.
You might feel that now you have a great salary you can afford to buy everything brand new, and in fact, you might never have bought anything used before, but buying second-hand is a great way to maintain or even upgrade your lifestyle, without spending too much. Whether you buy a used Land Rover from Affordable-Cars Group or a well-loved pair of Jimmy Choose from Schpock, you can maintain your lifestyle without the inflation. Give it a try -you can find some real bargains if you’re willing to look.
Experiences Not Stuff
When you start earning more money, it can be tempting to blow it all on new cars, bigger than necessary houses and lots of designer bling, and it’s great to do a little of that, but if you want that money to go further and really enhance your life, you should think about spending it on experiences, no stuff. You’ll be far more rewarded by an amazing holiday, those riding lessons or that hiking trip in the Lakes than you will a pile of possessions that lose their shine after a few weeks.
Get Serious About Saving Your Money
If you’re lucky enough to negotiate a much higher salary, before you do anything else, set up an automatic transfer to your savings account; preferably use a savings account that is not instant access. If the money leaves your current account the second you’re paid, you won’t really miss it and you will start to build up a nest egg that will enable you to live a great lifestyle in the future. It might not be the most exciting use of your money, but it will be better for you and your family in the long-term.
Lifestyle inflation is not inevitable. If you’re sensible with your salary you can live your best life, make amazing memories and not end up in lots of debt or having to work harder and harder and harder just to keep up.