"It's exciting to get a raise. Not only does it mean you're getting recognized for your hard work, but it's also the perfect moment to upgrade your life. To celebrate, you might book a nail appointment, schedule a vacation, or hit "purchase" on the things that have been sitting in your cart. You also have to take yourself out for a congratulatory dinner and drinks, right?"
"Instead of going out to dinner once a month, you go out every Friday. Instead of working out at home, you get a gym membership. Instead of shopping at your local grocery store, suddenly you're swiping your card at gourmet delis. It could explain why you don't have any money in savings, why you have nothing left at the end of the month, and why you're going into debt. Here's what to know about lifestyle creep, and how to prevent it."
Lifestyle creep occurs when income increases lead to gradual spending increases on small comforts and conveniences rather than saving or investing the extra money. Small purchases such as daily coffee, frequent dining out, gym memberships, and pricier groceries add up and can silently consume a raise. These incremental costs can explain low savings, empty month-end balances, and growing debt despite higher earnings. Awareness of habitual upgrades and setting clear financial priorities help prevent lifestyle creep. Practical steps include budgeting, automating savings, delaying new recurring expenses, and tracking discretionary spending to ensure raises improve long-term financial health.
Read at Bustle
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