Have you ever noticed when you get a pay rise that even only a few months later you have no idea where that extra money is actually going? While at first you might have fantasized about all the great things you would be able to do with that increase in monthly income, the reality is this money often seems to magically disappear in just a short time and get absorbed into your regular budget.
This phenomenon is commonly known as lifestyle inflation and it means that every time you get more money, you also generally increase your minimum required lifestyle standard. Where at first you were happy with a second-hand car, that later needs to become a brand new car. And that brand new car needs to be handed in for a SUV just a few years later… Similarly your level of luxury on holidays, fancy clothes, expensive meals out etc. all increases, and likely any extra income is simply used for these purchases. Continue reading →
No matter at what stage in your life you are, you probably feel that you don’t have enough money to live the lifestyle you truly aspire, let alone to behave (even more) sensibly with your money. When planning out, or even just thinking about, putting money aside to save, invest or pay off a debt, it is tempting to justify holding off making that sacrifice until you…. (insert excuse here).
Until you earn more? Until you’ve finished your post-grad course? Until you are married? Until you have bought a house? Until your children are independent? You can come up with a billion reasons here, many of them probably valid in their own way, so let’s look at some of the most common excuses, so you can appreciate that with every change in your life, your spending patterns will most likely also change.
There are two main reasons why this thinking pattern of “I will start saving when…” never really works: Continue reading →