Lifestyle Creep

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. ⠀⠀⠀⠀⠀⠀⠀⠀⠀

Get more money tips in our newsletter, sign up below 👇🏾

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s