Save a fixed percentage of each paycheck instead of a fixed dollar amount. When you get a raise, your savings automatically increase without extra effort, and the extra money goes to investments rather than lifestyle inflation.
Now, if you're saving a fixed amount from every paycheck, I want you to consider doing something different. Save a percentage instead. So let's say you decide to put 10% of every paycheck into your retirement plan, and then you get a raise. Guess what happens? Well, you automatically give your savings a raise as well. You don't have to think about it. You don't have to remember to log back in, change anything, and most importantly, you never get accustomed to spending all that additional income, because that's one of the biggest problems I see when people make more money. Their income goes up, and somehow their lifestyle goes up just as fast. The nicer car, the nicer apartment, the more dinners, more stuff. And five years later, they're making a lot more money, but they're wondering, why don't I have more wealth? Because making more money doesn't necessarily make you wealthy. Keeping and investing more of what you make does. So every time you get a raise, make sure your future gets a raise as well. That's finances con corazón.
