Lifestyle creep

Did you ever get a raise, bonus or tax refund, and at the end of the year you have no idea where it went?

“Lifestyle creep” happens to most of us. It’s so easy to add a bit to your lifestyle every year without even realizing it, especially if your income rises.

Lifetsyle creep is a problem because:

  • It eats up your raises and your extra cash.
  • You get used to a lifestyle that you can’t sustain, because it is not part of your retirement plan.
  • It’s one of the main reasons most people have to make a big cut in their lifestyle when they retire.

There is a solution. Review your cash flow and retirement plan every year. Make a conscious decision to let them both creep up together.

I was recently interviewed by Joel Kranc, who has written an excellent article on this topic. Read it here:

How to fend off ‘lifestyle creep’ as you start to make more money

 

Ed

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