This popped into my head because I just received a pay increase and I was just wondering How to Avoid Lifestyle Creep when you get a pay raise. I asked on my Instagram Story and got some interesting answers.
When you get a pay raise automatically you would feel like splurging and spoil yourself, I am so guilty of that. This year I decided to live in the same income bracket and not increase my expenses to save more.
How to Avoid Lifestyle Creep when you get a pay raise.
Take the extra money and save it and continue to live on your precious salary.
Revisit your budget and bank account and goals for that matter, to make an informed decision of what to do with the extra income, look at any increases that are coming up and work that into your budget and the extra money.
Build your emergency fund if you don’t have it yet. Aim for about 3 to 6 months of living expenses.
Look at your saving rate, consider increasing your savings rate, to achieve your personal finance goals sooner.
Pay off debt if you have any by way of extra money towards your debt this will surely save you money on interest in the long run.
Build your sinking funds for events or occasions that happen yearly so that you do not find yourself reaching out for your credit card to fund them.
Remember that everyone’s personal finances journey is different for everyone, stay focused on our journey and do not compare yours to anyone’s.
It is best to always remember WHY you started working on your finances and never lose sight of that in order to achieve your end goal.
For more personal finance talk follow me on Instagram @budgetingandmo