Does it feel like you are running out of money despite a high earning package? Well, you deserve to live a better lifestyle if you are earning good, don’t you? Do you feel trapped in a life living paycheck to paycheck? It is great that you can pay your bills, but what about building wealth?
Well, we’re not saying you don’t deserve to ‘treat yourself’; we only ask you to be a little cautious of falling for the phenomenon of ‘lifestyle inflation’ and getting trapped in to the loop of earn-spend-earn more-spend more-earn even more-spend even more!
Spending more is Okay
We’re not going to lecture you about being economic and frugal here. We agree that sometimes spending more makes sense. As we progress in our professional and personal life, there are some areas that ask for more spends. For e.g., you might want to re-look at your wardrobe after that swanky promotion you got since you will be networking with a different class of people now and will need to fit in. Or it might be that you’ve gotten married or have had a child and now need a car/bigger home.
With responsibilities increasing at both professional and personal front, you might have to even hire others for the minor, more time consuming jobs such as maintaining your garden, tidying up the house etc. And it is only fair that you do. Well, you ought to maintain a healthy work life balance too! All you need to do is keep a check on your expenses and reconcile it with your income every month. There are numerous mobile apps that can help you do that today. You just have to feed the information to it regularly and voila, they even give you valuable insights with pie-charts and graphs about your spending patterns!
Lifestyle inflation is not okay
Like we have said above, avoiding life style inflation completely may not be possible. However, every increased expense affects your future financial situation. All we are asking is that even if you can afford to buy those high end brands, should you be buying them? And even if you feel you deserve to spend on yourself after working so hard, are you sure this amount won’t affect your retirement fund or medical emergency fund?
In other words, what will you chose – spending 20 grands on a classy pair of designer shoes that you will wear for only a couple of years before throwing them away or invest the same amount expecting to get twice the worth in a decade? You could do both, but what you chose to do is what will define your financial future.
Bottom line being, you could go from earning Rs. 20,000 a month to Rs. 2,00,000 a month and still be under debt or feel as broke! This can be easily avoided, given you chose to be more mindful about what you want and what you really need!