It's a miracle! Employers are discovering higher wages are an incentive to get more employees. Some of us are making more, some of us have some stimulus money or a life insurance payout, and some of us saved a bunch during the pandemic.
More money is good, but watch out – here’s how to avoid a common mistake that comes along with having a bit more cash.
We have to avoid “lifestyle inflation.” Whenever we come into more money, a major temptation is to upgrade our life! Buying a new car or renting a fancier apartment can be very tempting – but it might not be worth it. Why?
When we immediately upgrade our lifestyle with new disposable income, we might find that all that new money ends up spent – and we’re right back where we started.
The most important thing to remember about finances is this: it's not how much you make, it's how much you KEEP.
It's always good to treat ourselves once in a while, but splurging on upgrades can eat into our retirement funds and emergency stashes. If you make more money – but keep your lifestyle essentially the same – you’ll be in for BIG savings, and well on your way to financial freedom.