Life Kit
How to avoid 'lifestyle creep'
Sep 12, 2023
Paco de Leon, author of 'Finance for the People,' provides insightful strategies to combat 'lifestyle creep,' the tendency to increase spending as income rises. Alongside journalist Ruth Tam, they discuss how societal pressures influence financial choices, particularly in your 30s. They share the significance of self-reflection, emphasizing a 'buy list' technique to manage impulse spending. By encouraging self-awareness and emotional fulfillment, Paco and Ruth highlight the delicate balance between enjoying life and maintaining long-term financial goals.
22:23
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Quick takeaways
- Make intentional choices about where money is spent to avoid lifestyle creep and falling into financial trouble.
- Define what is 'enough' to resist societal pressure, align spending with personal values, and foster contentment.
Deep dives
Avoiding Lifestyle Creep
Lifestyle creep, the phenomenon of spending more money as income increases, can lead to financial trouble if not managed. The key is to make intentional choices about where money is spent and to avoid letting expenses creep up without realizing it. This can be done by understanding emotions around spending and distinguishing between wants and needs. Examples of lifestyle creep include upgrading living arrangements, dining out more frequently, or indulging in small purchases that add up over time. By being mindful of spending habits and making intentional financial decisions, individuals can avoid falling into the trap of lifestyle creep.
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