The "earn more, spend more" trap
Training 75 minuteslifestyle creep
You got a raise. Temptations everywhere: a bigger car, a flat downtown. Spending grows with income and freedom moves away. Send the raise into assets.
Training goal: $1,000 passive income without raising expenses
▶ Play this trainingWhat you will learn
- A raise does not make you rich, the gap between income and spending does.
- A lifestyle upgrade is a one-time joy and a payment forever.
- First buy the asset that pays for the wish, then the wish.
Your real-life step
Split your next raise: half to savings and assets, half to life. Joy and freedom both grow.
Questions and answers
What is lifestyle creep?
Spending that rises with income: a pricier car, flat, habits. In the end there is no more spare money.
How do I avoid spending the whole raise?
Split the raise in advance: half to savings and assets, half to life.
Is it bad to upgrade my life as I earn more?
No, as long as spending grows slower than income and the gap goes into assets.
More trainings in this module
- What money really is
- Assets vs liabilities
- Personal cash flow
- Needs vs wants
- SMART money goals
- Impulse buying
Numbers are illustrative. A game, not financial advice.