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  • Writer's pictureZachP

#57. The Silent Wealth Killer

As I sit here on a quiet Saturday evening, sipping on a foamy beverage and reflecting on things, I can't help but think about how my spending habits have evolved over the years.

It is fascinating to observe the way our expenses tend to grow as our income increases.

This phenomenon, commonly known as lifestyle creep, can slowly and subtly sabotage efforts to build wealth and achieve financial freedom.

Lifestyle Creep Is A Sneaky Thief

Lifestyle creep is a sneaky thief that can rob us of our financial goals without us even realizing it. It's when we start earning more money and, without even noticing, our expenses begin to match (or even exceed) our new income level.

As we progress in our careers and our salaries grow, it's only natural to want to enjoy more expensive luxuries. But the problem arises when we start spending more on things we don't necessarily need or value, simply because we can now afford them.

For example, you may have been perfectly content with your reliable older car, but as soon as that promotion comes along, you find yourself wanting that new 2023 model. Or, you may have been cooking most of your meals at home, but now that you're earning more, dining out at fancy restaurants becomes a regular occurrence.

Before you know it, you're living paycheck to paycheck despite earning a higher salary than ever before.

Make Wealth Building A Conscious Choice

The key to building wealth and avoiding lifestyle creep is to make conscious decisions about your spending. Instead of letting your expenses automatically inflate with your income, actively choose where your money goes.

This involves setting financial goals, creating a budget, and prioritizing your spending based on what truly matters to you.

For instance, you might decide to allocate a certain percentage of your income towards savings or investments, while using the rest to cover your necessary expenses and enjoy the occasional luxury. By doing this, you can still enjoy the perks of your increased income without falling into the lifestyle creep trap.

It's essential to find the right balance between enjoying the present and planning for the future. While it is important to reward yourself for your hard work, it's also crucial to keep your long-term financial goals in sight.

Tips to Dodge Lifestyle Creep

  1. Track your spending: Keep a close eye on your expenses and review them regularly to ensure you're not overspending on non-essential items.

  2. Set financial goals: Determine what you want to achieve financially, both short-term and long-term, and create a plan to reach those goals.

  3. Stick to a budget: Create a realistic budget that covers your necessary expenses, savings, and investments, while still allowing for some discretionary spending.

  4. Prioritize your values: Spend on experiences or items that truly bring you joy and align with your values, rather than trying to keep up with the Joneses.

  5. Save and invest: As your income increases, use the extra money to boost your savings and investments rather than spending it all on lifestyle upgrades.

Remember, dodging lifestyle creep doesn't mean depriving yourself of all the good things in life. It's about making intentional choices with your money, so you can enjoy both the present and the future without unnecessary financial stress.

Share your thoughts and experiences on lifestyle creep in the comments below. Let us help each other stay on track and build lasting wealth together. And if you enjoyed this article, don't forget to hit the heart icon, share, and subscribe for more content.

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