Roxanne Langley ~ Money Coach

October 8, 2021

Tips to not be caught up in Lifestyle Creep

To take control of your finances means completely changing the way you think and look at your money. Living with intention doesn’t happen overnight and it truly is an ongoing process.

Lifestyle Creep

Getting a pay raise should be seen as a fantastic opportunity to SAVE more. But, it seems like whenever people get a raise, that means they can get a life upgrade.

I got a raise = I can buy a new car or move into a bigger apartment.

I got a raise = Let’s go shopping, drinks are on me!

FALSE!!! 

If you are successfully managing with your current income, great job! Oftentimes when budgeting you come to a point where the only thing you can do to save money is making more money. This is an unfortunate reality but there are only so many things you can cut spending on.

If your goal is to retire early, travel more, or not stress about the future, increasing your expenses when getting a raise should be seen as unnecessary spending.

Exception: If you live in a bad neighborhood and want to change locations or you don’t have a car and it would facilitate your life a lot, obviously you should look into upgrades for those things. But the general rule of thumb is: if your income changes, your expenses don’t.

It’s a common misconception that having a fancier car or living in a cool, hip apartment is going to increase your quality of life and therefore make you happier. Do you know what would probably make you happier? Retiring early and doing whatever you want.

Treat yourself? Match it to savings!

As much as we want to save more and spend less it can be hard sometimes. (I’m human too guys and some months are tougher!) There will inevitably be things we want to spend money on and honestly, that’s ok! Budgeting shouldn’t feel like you’re sacrificing living or simply enjoying an evening out with friends to stay on budget. So yes, every once in a while it’s important to treat yourself.

However, if whatever item or experience you’re thinking about purchasing is a significant chunk of change, consider matching that same amount to savings!

For example, let’s say you really really want a new Chanel purse that costs $1,000. You could spend that on the purse and also contribute $1,000 to your savings as well. The key is to wait until you can match the amount to savings to actually make the purchase. You win in several ways, you now own a really cool purse, you paid for it in cash (ask for a cash discount), and you saved the matching amount.

For me, this purchase is something I really really want for my home, a new dining table. For every $100 I save for the purchase I’m also putting $100 in my investment account at the same time.

Do you have a favorite way of saving money? To continue building your emergency fund, short-term savings, and investment accounts take discipline and work. Some days are easy while some you want to throw the towel in and say, “forget it”. Don’t stop now, your future self will thank you. If you haven’t started, let’s talk and map out a step-by-step plan for your situation.

As always, thank you for following and being part of my business. I can be reached at hello@roxannefinancialcoach.com.

Your Money Coach,

 

 

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