Want to live well and put more savings away each year?
It’s completely possible… if you can keep your lifestyle inflation in check.
This task will take some financial discipline on your part. Don’t worry! I’m not suggesting that you start rinsing out your sandwich baggies or forego every Starbucks latte.
Nope, I’m not gonna ask you to do that.
All I ask, should you choose to accept this mission, is that you hold your budget to what it is right now (with minor exceptions), even if your pay increases.
Are you ready to save?
What’s the deal with lifestyle inflation?
You wouldn’t think that simply keeping a budget in check would be so difficult, but it really is.
Imagine that you graduate from college, get a “real” job, and start to make decent money. As the years progress pay increases and bonuses continue to inflate your salary. How do most people respond to this situation?
By spending more, of course!
Trust me, I can relate to this pressure. Over the past 10 years our family’s income has increased by more than 200%. Even though our income has jumped by leaps and bounds, we haven’t gone completely off the rails with our spending.
Sure, now we buy better coffee and bacon 🙂 but our spending hasn’t kept pace with a rising income.
Want to know our secret to keeping lifestyle inflation in check even with a rising income?
The Key to Combatting Lifestyle Inflation
There are two simple steps to keeping lifestyle inflation in check:
#1. Allot an appropriate portion of pay raises to the budget.
As our family grows so has our grocery, clothing, and entertainment budgeting categories. At each raise we reevaluate the current budget amounts and carefully add where necessary. It’s foolishness to expect a family of seven to spend the same amount on groceries as a family of two!
#2. Throw the rest of the raise at a financial goal.
Our Financial Goal: Paying off the Mortgage
It’s no surprise that we put the remainder of our pay increases towards paying off our mortgage. We’re anxious to be done with that gigantic ball and chain. It hardly feels like a sacrifice to watch as more and more debt disappears with our efforts.
Sure, we’d love to have a $500 per month entertainment budget, but at what cost?
Choosing to put extra money toward our financial goals isn’t a burden, it’s exhilarating. We’ve made the better choice and are anticipating the rewards of a life completely debt free.
Will you join us in this adventure?
Do you struggle with lifestyle inflation? What area of your budget suffers the most inflation as earnings increase?
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