Every cent gets sucked up by some expense, often by ones you didn’t have just a few months earlier.
That’s lifestyle inflation!
You make more, but the cost of the lifestyle you demand devours anything extra.
Here are few ways to make sure your next pay increase has a lasting effect on your prosperity.
Limit your ‘hobby’ shopping habit
I often hear debates about what is South Africa’s favourite sport. Some say is Rugby or Soccer or Cricket.
But I disagree...
I think it’s shopping. If you doubt it, check out mall parking lots on Saturday’s and holidays, even during the week! You’ll always get hordes scampering around shopping away
When money is tight, you might avoid going shopping so you don’t spend money you don’t have.
But when you get a little bonus you turn the taps wide open
And this is when a slow financial bleed begins as expenses rack up.
This is the result of recreational or hobby shopping; the kind of shopping you do because it makes you feels good or its fun.
If you shop for these reasons, you may have a shopping addiction that’s eating away your money.
"The 'Russian Effect' is about to see this R56 billion market head into its largest deficit in decades"
by Francois Joubert
The price of this one metal is about to soar…
And YOU could make BIG money!
* I've read up 100's of pages in research reports.
* I've looked at 'secret' Russian government reports on the matter.
* I've spoken to traders of this metal…
And everything's pointing to one thing: The price of this metal is about to soar!
Bank your income raises and bonuses.
Instead of buying more things with a bigger pay check, why not bank it towards your financial goals?
Take it this way; if you get a 15% pay increase make sure you boost your savings or investing by 15% more.
A great way to ensure really you bank your salary increases is to save your income as a percentage,
So instead of setting a rand amount of savings per month as your savings goal, use a percentage of your income instead.
This way…as your income increases, so does your savings.
It’s also the best way to live within your means and to ultimately create financial security.
But that flashy car or toy gadget will never provide you with financial security!
Get your priority right by understand your needs and wants.
What are your financial priorities? What is your end game?
Is it to save for your kids’ education? Build your retirement portfolio? Or simply save for a rainy day?
To me are your needs that you should be providing for.
The problems is, when you don’t know your priorities or forget them; you’ll spend on short term wants like entertainment and shopping than you will on your needs.
This will not help you build long term wealth. So make sure you spend on your needs rather than your wants.
Lifestyle inflation is a route to a never ending series of high cost snags that drain your time and attention, and eventually your WEALTH!
So set your financial priorities and stick to them.
After all higher income shouldn’t drive you towards spending more and racking up expenses, instead it should be your stepping stone to
a wealthy future.