Ndubuisi Egwim explains how to avoid lifestyle inflation as your income grows. Keep your car and house the same for 2-3 years, set a clear financial goal, and automate your savings with direct debits that split income by percentage. The key: don't spend more just because you earn more.
So if you can keep your expenses and your lifestyle just about the same, just for a few years, I'm not saying you're never ever going to change your lifestyle, but just for a few years. Drive the same car. Living the same house for two or three years can make a massive difference. 2. Obviously have a clear goal. If you have a clear financial goal, that can drive what you do. It can drive your behavior. It can drive how you save and invest your money if you have a clear plan. Number three, create a budget that goes again into having a clear financial plan. If you have a budget and you set it up automatically, I always talk about automatic savings, so you can call it a mass automated monthly activated savings system. What that means is that you set up direct debits so that your income goes by percentage into your savings account, investments account, your giving account, so you know exactly what you're spending on. So don't increase it just because your income has increased. Now again, it's important to differentiate between needs and wants.
