An increase in income generally correlates to an increase in spending, this is known as lifestyle inflation. But whilst you’re working hard and you want to enjoy the perks of your higher income, how can you still keep your financial goals on track?
Whilst you might be tempted to keep up with the Jones, you have to consider that your financial goals and your financial position is exactly that, it’s yours; so, you need to live your life according to your future objectives.
Here’s some tips for not falling into the inflation derailing trap
- If you are putting aside a percentage of your income, when your income goes up ensure your savings also increase. By sticking to a certain percentage, you can ensure that your goals are kept on track.
- Life is full of needs and wants but distinguishing between a need and a want can be quite difficult. There are basic needs that need to be met, such as water, food, shelter etc… but you can provide these in many different ways, you can opt for tap water instead of bottled water, a hearty stew instead of a juicy steak for example, so you have to tow the line on what is a want and what is a need.
- Simple maths is a great way to stay on budget, quite simply if you spend less than you earn you will be able to save.
- Ensure you have a fun fund; it can be quite disheartening working hard and feel like you never get to reward yourself. Plan a nice meal, a night out, or treat yourself to a holiday with the family. Just because you’re saving it doesn’t mean you can’t have fun.
- Being aware of your finances and living within your means is important but speaking with an expert that can set realistic goals for you will help you get to where you want to be quicker.
Financial advice you can trust
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