It’s all about how you think.
Morning break conversations are where it’s at. What is the meaning of life? Have you heard about the current world politics? How are the kids? Did you hear that Barry Gary just quit? It’s a really great small chunk of time in our day where for a small time we can have absolutely meaningless discussion or deep and thoughtful conversation.
So this mornings conversation with my coworker stretched from religious freedom to work life attitude and eventually money. He quoted Warren Buffett (A quote which I don’t have much time to validate) and said, “It’s all about how you think. If you make $10 and only spend $7, and another man makes $100 and spends $101 dollars, which one is rich?” Obviously the answer is the first man with a surplus instead of the second man with a deficit. This is stuff that I already know about, but it’s nice to have a reminder every so often to keep an eye on lifestyle creep.
Lifestyle Creep
Sort of like a real creep only lifestyle creep doesn’t take photos of you on public transport. Lifestyle creep occurs when we start to have access to more money either through savings, a promotion at work or paying off a loan. We start spending more money on things that we used to consider a luxury but now consider it a right. It’s things like a more expensive bottle of wine on Friday nights, more expensive clothes or a TV cable channel. The point is that lifestyle creep when left unchecked can spiral out of control until, even with more money, we save less than when we were making less money. Luckily for me my luxury is my tin of Milo and I make sure to keep that in check.
Lifestyle creep can mean we don’t have enough money in savings or to invest in assets. A US Federal Reserve report in 2017 stated that 4 in 10 Americans Adults couldn’t produce $400 in the event of an emergency without selling something or sliding into debt. That’s nearly 80 million people and or their families. That’s just over 3 times the population of Australia that are financially unprepared for an emergency, both low and middle income earners.
Finances are an important part of our life so we need to remember the multiple facets of personal finance, which is why it’s always good to assess if and how lifestyle creep, is creeping up on you.
GYST 