By Amy Ng, Associate Wealth Manager
As you age and realize your earning potential, it’s only natural that you will add to and enhance your quality of life. Economic theories assume that humans are rational beings, yet the irrational action of spending beyond ones’ means is a very common reality. Many people see every income boost as a means of buying more stuff. Each raise at work results in a new addition to an increasingly cushy lifestyle filled with unnecessary purchases. The result is people putting off retirement. Even with plentiful salaries, the ever increasing investment in stuff leads them to constantly feeling like they don’t have enough money. Most of us have, or know others who have, experienced the allure of lifestyle inflation. Today’s post covers five things to consider when experiencing this enigma:
- Identify Your Goals
Upon receiving a raise or bonus, one of the first best things you can do is sit down with your loved ones and discuss your personal and financial goals. Talk about where you want to be in two, five, or even ten years. Whether you want to travel more, save for your children’s educations, pay off debt, or buy a home, you’re more likely to avoid lifestyle inflation if you understand how those funds can bring you closer to achieving those goals.
- Get The Money Out Of Your Hands