Over one-third of adults in the United States reported that they would not be able to cover a $400 emergency expense without borrowing money or selling assets (Federal Reserve Survey).
This suggests that as people's incomes rise, they often tend to increase their spending on non-essential items and experiences, leaving them financially vulnerable in the face of unexpected financial challenges.
In this episode, Dave will be sharing some examples and, more importantly, how to NOT get caught up in lifestyle inflation.
Lifestyle inflation, also known as "lifestyle creep" is a phenomenon where an individual's spending gradually increases as their income rises.
It can have significant negative effects on your long-term financial well-being.
Trust me, the longer you spend more than you make, the longer it will be before you retire.
Honestly, lifestyle inflation or lifestyle creep is common to most people. But YOU are NOT most people.
YOU are unique, ONE of a KIND.
Starting today, be different in this one regard, be different with your money...
That includes living below your means and not following the crowd in your personal finances. If you do that you’re going to succeed with money.
Questions for Review:
- Have you suffered from lifestyle inflation as you've started to earn more money?
- Do you spend more than you make? If so, please think twice before making that next big purchase.
- How can you live life enjoying your resources without spending more than you make?
Verse From the Episode: "A faithful man will abound with blessings, but whoever hastens to be rich will not go unpunished." -Proverbs 28:20