Lifestyle Inflation; the Silent Beast​.

A couple of months ago, I found myself debt-free and living my best life. Had just gotten a pay increase, with no debt to pay back, I was feeling like a queen floating on a pink and blue cloud. The first month was fine; I managed to save about $150 that went to my Emergency fund and the same for the second month. But you can probably tell from the way I'm talking that things went downhill from there.

Good day, beautiful people; how is your day going so far?


Today we need to talk about the untold story of the silent beast and what to do when you have just gotten that extra bit of money dropped into your account. I will start by defining what lifestyle inflation is, some tell, signs that you could look out for, and ways to avoid making this mistake.


What is Lifestyle Inflation?

Lifestyle inflation refers to an increase in spending resulting from an increase in income. It tends to continue each time someone gets a raise, making it perpetually difficult to get out of debt, to save money or to meet any kind of big picture financial goals. It is sometimes known as the problem that occurs when one tries to keep up with the Jones. Lifestyle inflation causes people to get stuck in the rat race of working to pay the bills and basically live paycheck to paycheck. And in the words of my mother," you are rich, poor, poor, poor, poor." As the month goes by.


What are the signs?

1. You are getting paid more money, but you are still living paycheque to paycheque. So this one is pretty self-explanatory. If you have had an increase in income through whatever means it is come from, but you find that you still have the problem of struggle to make ends meet or even to have some extra money to save at the end of the month, then you might just be experiencing lifestyle inflation. Now some circumstances might disqualify you from this, but generally speaking, if you have ever thought about why you still feel broke even though you are making an extra $100 each month, this might be why.

2. Create a budget and track your progress people, especially entrepreneurs; there are times when we can get a big paycheque or even have a couple of big orders come in. Maybe you have a new client who seems to be bringing in some good amount of money, so you move from being "broke" to "good," and something in your shifts. These things that used to be okay are now just not cutting it anymore. So, for instance, before, you were all right with living with a roommate in an apartment building, but now it feels like this can't fit the image of what a successful business person looks like. Or an upgrade from using the bus to travel around to having a new car to drive to all your new events. But you also need to remember that the clothes you used to wear just don't cut it anymore, so you need to get a better and more professional closet too. The list can go on and on and on, hence a drastic lifestyle change.


3. Drastic lifestyle upgrade. As young business people, especially entrepreneurs, there are times when we can get a big paycheque or even have a