In a recent article, experts warn against lifestyle creep, a phenomenon where people tend to spend more as their income increases. This can often lead to financial difficulties and a sense of guilt for not growing their net worth despite higher earnings. Small choices, like shopping at specialty farmers markets or taking cabs instead of public transit, can add up over time.
Financial adviser Kalee Boisvert and New School of Finance founder Shannon Lee Simmons both highlight triggers for lifestyle creep, such as significant salary raises or major life changes like having children. While some spending upgrades can be rewarding as individuals reach financial milestones, it’s important to align spending with personal values and goals to avoid financial strain.
To combat lifestyle creep, experts recommend frequent financial audits, budgeting, and reviewing expenses. Being mindful of where money is going and prioritizing savings for long-term goals can help individuals stay on track. Simmons also suggests ignoring any automatic salary increases and pretending they don’t exist to prevent unnecessary spending.
Ultimately, being intentional about where and how money is spent can help individuals avoid lifestyle creep and prioritize financial resilience. By making informed choices and aligning spending with personal values, individuals can work towards financial stability and avoid unnecessary financial strain in the long run.
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