- Life After Five
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- The trap of lifestyle inflation
Imagine this—you’re making over 100K a year and still be poor.
I understand it’s unfathomable.
But it is a serious pitfall people face. So it’s best to uncover it here before you fall victim to it.
Here’s how it works…
📈 Lifestyle Inflation
When income increases, so does spending.
Let’s say you get a raise, or reach new heights in business. But instead of keeping your expenses the same and saving/reinvesting the extra income, you upgrade your lifestyle.
You might move to a bigger home.
Start dining out or going on holidays more often.
Or buy a luxury car instead of sticking with your reliable one.
At first, it feels great because, hey, you’re just enjoying the rewards of your hard work!
But over time, these new expenses add up, and you start living paycheck to paycheck again—just like before your income increased, just with bigger numbers now.
This happens because no matter how much money you make, you keep spending to match or exceed it.
So to avoid this: Focus on keeping your lifestyle simple and remember that true wealth isn’t about how much you make—it’s about how much you have and grow.
Lifestyle inflation is a real thing, and it’s dangerous!
In the moment it feels all nice and fun, but after a while, you realise that you’re not even using 80% of the things you’ve bought.
That’s why it’s best to put purchasing systems in place to prevent you from overspending.
Making the right financial decisions is important—especially in business!
👞 Today’s Action Step:
Look at automating your savings and capping lifestyle spending at a certain percentage of your income.
“30% will automatically go to my savings and I’m not allowing myself to spend more than 20% on entertainment or other fun purchases.”
📖 Today’s Book Bit
Vicki Robin
When you earn more, the world tempts you to spend more, but the key to financial independence is resisting that pull and learning to enjoy enough.
Book: Your Money or Your Life
There are so many fun things to buy & do! It is sooo tempting to just go ahead and give in.
But that’s a problem, and you know it too.
Wealth is about what you have and managing your assets properly.
🚿 Today’s Shower Thought
Slowly becoming comfortable with being uncomfortable is a huge step towards growth.
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