What is Lifestyle creep? Essentially, it’s when you start spending more money as you make more money. ⠀⠀⠀⠀⠀⠀⠀⠀⠀
Here’s an example:⠀⠀⠀⠀⠀⠀⠀⠀⠀
Tori graduates from PA school and lands her 1st job making $91k a year. She decides it’s time to upgrade to a new $76k luxury vehicle. After all, she did just survive pa school, why not reward herself? 😩⠀⠀⠀⠀⠀⠀⠀⠀⠀
Soon after , Tori decides it’s time to upgrade her living arrangements. Marriage & children means she needs more living space. Time is ticking so if not now then when…right? ⠀⠀⠀⠀⠀⠀⠀⠀⠀
Tori mortgages a $300k home with an FHA loan 😖⠀⠀⠀⠀⠀⠀⠀⠀⠀
Tori has been working hard and owes it to herself to do something nice. So for her birthday she treats herself to an all inclusive Caribbean vacation & splurges on a new designer handbag. ⠀⠀⠀⠀⠀⠀⠀
Vacation + Designer bag paid for with an American Express 🙃 for a total of $3k at a 24.99% interest⠀⠀⠀⠀⠀⠀⠀⠀⠀
Monthly car payments are “only” $346/month at a 0% interest rate (new vehicle), mortgage is $1800/month and minimum credit card payment is $25/month. Not bad right?⠀⠀⠀⠀⠀⠀⠀⠀⠀
WRONG!⠀⠀⠀⠀⠀⠀⠀⠀⠀
Tori has added an additional $379k of debt to her $161k of total student loans & other previous debts. That’s a whopping $540,000 Tori owes only making $91k a year ☹️⠀⠀⠀⠀⠀⠀⠀⠀⠀
Lifestyle creep- buying stuff you can’t afford with money you don’t have. If you really wanna treat yourself, pay off your student loan debts before any and I mean ANY upgrades. ⠀⠀⠀⠀⠀⠀⠀⠀⠀
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