Home Finance Recently Promoted? How to Not Give In to Lifestyle Inflation

Recently Promoted? How to Not Give In to Lifestyle Inflation

lifestyle inflation

You’ve gotten a promotion — congratulations! It’s so exciting to see your hard work pay off and to feel validated for your skills and talents. Of course, the extra pay is a nice perk, as well.

When many people get a raise, they have a lot of good intentions about what to do with the extra money. However, the truth is that those good intentions fall aside, and people simply spend more. They start buying nicer things, and their lifestyle goes up to match their income.

If you have financial or savings goals, it’s important to avoid lifestyle inflation. The folks at Freeway Insurance are experts at saving people money with affordable car insurance and they’ve got some tips for you.

Budget for Fun Money

“All work and no play makes Jack a dull boy,” the saying goes. Very few people can earn money and save everything except their essential expenses. We all need a bit of money to splurge every now and then.

However, simply deciding to splurge without a plan quickly leads to lifestyle inflation. Instead, create a budget so that you get a certain amount of “fun money” each week. You can use this to eat out, buy a new outfit, or do whatever else you want.

The Freeway Insurance team knows it’s important to have fun. With fun money included in the budget, you’ll have a clear idea of how much you’re spending and be able to continue to put money in savings as well.

Make Conscious Decisions about Upgrades

Upgrading your lifestyle as your income increases isn’t evil in itself. It’s just that if you’re not conscious of it, it can create an expensive lifestyle that you struggle to maintain.

Instead, create long-term goals that truly matter to you. If you’ve dreamed of driving a new car, save up for that and make it a reality. Or, if a new furniture set is important to you, make that upgrade purposefully.

When you make conscious choices about improving your lifestyle, you’re less likely to let things spin out of control. Carefully budget for each upgrade and make sure you can afford to maintain it. If you can’t, that change will need to wait.

Frequently Shop Around for Better Prices

Many of us tend to assume that the prices we pay for things are set in stone or that they may increase but never go down. That’s true if you never compare prices and look for better providers. But if you shop around, you’ll be amazed at what you’ll save.

You can also shop around for a better cell phone plan, internet provider, television service, and much more. You’ll spend less of your paycheck each month, which leaves more money for savings and fun.

Keep Your Lifestyle in Check

When you live below your means, you have a lot more freedom. You can choose to travel, upgrade purposefully, or simply build large savings account for a future goal or rainy day.

If you’d like help shopping around for car insurance, Freeway Insurance can help you get a better rate on excellent coverage!

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