Lifestyle inflation isn’t something that gets talked about often, which means a lot of people aren’t even aware it is occurring. When you get a new, better paying job, you are often spending more to accommodate your new lifestyle. This can happen to be best of us, but awareness is key to stopping it.
It commonly happens to students who are getting their first adult job. Things that were once luxuries are now thought of as necessities, and suddenly you feel the way you did when you didn’t have money, because your lifestyle has changed so much you don’t feel like you are making more.
In the last year, I have had two jobs, each having a higher salary than the previous. For the first couple weeks, I didn’t understand why I didn’t feel like I had anymore money. Looking at my monthly budget told me that I was eating more takeout, and by that I mean A LOT more takeout. I realized that having more money had made me feel like I could do more things, and I spent more money without even thinking about it.
So how do you stop lifestyle inflation? Be aware of your finances. It is okay to spend more, but make sure you still spend within your means. Take some of the practices you used when you were making less money and continue to implement them. You don’t have to eat ramen for every meal, but you also probably shouldn’t order Chinese takeout everyday either.
The other thing you can do is automate your savings account. Take a little of that extra money you are making at your higher paying job and put it directly into your savings account. You’ll have a bit of surprise money when you look at your savings account, and as long as you are actively working against lifestyle inflation, you probably won’t even notice it’s gone.
Lifestyle inflation is nothing to be ashamed of, and it’s totally okay to treat yourself after you get a new job, just don’t let yourself go broke for a latte.
Have you succumbed to lifestyle inflation? What do you do to prevent it? Tell us in the comments!