Lifestyle creep, also known as lifestyle inflation, is something that can happen before you even realize it. As your income increases so does your lifestyle.
Why is lifestyle creep dangerous?
When you receive the good news that you are getting a raise or a new job with a higher salary that means you are going to hit your financial goals faster, right? Not necessarily, in fact in most cases not. Your goals may even slow down!
For most people, as they receive news that they got a raise their mind instantly goes to all the places they can now spend the money.
First, we need to go out to a fancy restaurant to celebrate. Then we can finally “afford” to upgrade the car… which will lead to a higher car payment. It is so easy to fall into the trap of lifestyle creep and end up spending your entire raise and sometimes even more!
How to stop lifestyle creep?
As soon as you know how much your increased salary will be, it’s time to sit down and figure out where to allocate that money.
If you aren’t already on a written budget, it’s time to get on one! Here is my easy-to-use budget template with pre-populated formulas so get you started!
Open up your budget and come up with a game plan for the additional money you will be receiving each month. Whether your increased salary will be $100 extra a month or $20,000 extra a month, you need a specific plan for the money.
What are your current financial goals? Are you paying off debt, saving, or investing? Allocate your extra money to these goals and stick to your plan.
It’s so easy to increase your spending when you’ve received a raise but it’s important to make your financial goals top priority. Yes, it may not be as fun to make that bigger debt payment but think of how amazing it will feel once you are debt-free and then all the money you receive is yours to keep!
In today’s fast-paced world, juggling the demands of work, family, and personal life can leave little time and energy for meal planning. The age-old question of “What’s for dinner?” often triggers a sense of dread, especially when trying to balance both health and budget considerations. However, with the rapid advancements in artificial intelligence (AI), meal planning has received a modern makeover.
Gone are the days of staring blankly into the pantry, hoping for inspiration to strike. Instead, AI-powered tools like ChatGPT have emerged as invaluable assistants, offering creative solutions to create family meals that are not only delicious and nutritious but also easy on the wallet. I’m sharing how to create a meal plan on a budget using ChatGPT with all the prompts I use.
In the bustling rhythm of modern life, our homes should serve as sanctuaries of tranquility and rejuvenation. Imagine stepping into an oasis where stress dissipates, and every corner exudes a sense of peace. Welcome to the world of easy home hacks that can transform your living space into a stress-free haven. In this article, we’re unveiling the top 5 life-changing home hacks that will not only bring order to your surroundings but also infuse your daily routine with a dose of simplicity and well-being.
In today’s digital age, where smartphones have become an integral part of our lives, it’s only fitting that we explore the countless possibilities they offer. Did you know that your trusty pocket companion can not only keep you entertained but also put some extra cash and exciting gift cards in your hands? That’s right, there’s a growing trend of apps that allow users to earn real money and redeem it for enticing rewards. Whether you’re looking to make some quick cash, save up for a special purchase, or simply indulge in your favorite online shopping spree, these apps provide a golden opportunity to turn your idle moments into productive ones.
In a world where homeownership has often been hailed as the ultimate pinnacle of financial achievement, it’s time to challenge the age-old notion that renting is synonymous with throwing money away. The journey towards financial freedom is not a one-size-fits-all equation, and dismissing the advantages of renting could mean missing out on a range of hidden benefits and financial strategies that can empower individuals in unique ways.
In this YouTube income report, you will see a detailed breakdown of how the channel made $13,110.57 in the month of July 20203, through Adsense, digital products, website ad revenue, course sales, memberships, freelance social media, and sponsorships.
In today’s digital age, financial literacy is more important than ever, and instilling money management skills in children from a young age is crucial for their future success. Greenlight, a leading debit card designed specifically for kids and teenagers, offers an innovative solution to help parents teach financial responsibility and empower their children’s financial independence. In this article, we will explore the benefits, pros, cons, and address common questions parents may have about the Greenlight debit card.
Be mindful of your friends
Another reason why lifestyle creep can be dangerous is our friends and the people that we hang around. Don’t fall into peer pressure.
If all of your colleagues upgrade their car when they make partner, don’t feel like you need to as well.
At the end of the day, you and your family have your own goals and they can make fun of you all day long. You are the one that will be so much happier with no car payments and maybe even a paid-off house!
Don’t stop there! Keep growing your income.
Just because you received a raise at work doesn’t mean that’s all the money you can make. Have you thought of picking up an online side hustle?
Here are 147 side hustle ideas that you can make money from home. I bet you have some skills that you didn’t even think you would be able to monetize!
I'm no longer struggling to pay bills.
Have you ever received a raise so that you are no longer struggling to pay bills but then find yourself no longer making progress on your goals?
Unfortunately, it is so easy to stop tracking your spending or working your side hustle because you no longer “need” to. But this is a huge trap because it can result in making zero progress on your financial goals or even going backward because you get too comfortable and start creeping t going into the red at the end of the month.
Don’t let this happen to you!
More Ways To Save:
Here at Freedom In A Budget, I am all about saving money! Here are some of the EASY ways that I save money:
• Fetch Rewards is a free grocery savings app that rewards you just for snapping pictures of your receipts. That’s really it. Free gift cards on groceries on thousands of products every day, no matter where you get your groceries. Just scan your receipts and get gift cards from places like Starbucks, Target, Ulta, Applebees. Use code QHKBH to earn 2,000 points ($2)!
• Rakuten/Ebates: Rakuten is my to go way to earn Cash Back from over 2,500 stores like Macy’s, Amazon, Sephora, Walmart and much more. Join Rakuten today for free, and you’ll get a $10 Cash Bonus to get you started! Every three months, you’ll get a Big Fat Check in the mail or a PayPal payment just for shopping.
• CIT Bank offers high-yield savings accounts that provide a safe, secure way to grow your savings.
• M1 Finance is an easy to use brokerage platform that allows you to invest in Fractional Shares and auto reinvest!
• Budget Templates: Excel budget templates with pre-populated categories and formulas to keep you on track with hitting your financial goals.
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