So as you get raises or bonuses, it’s really easy to start increasing your expenses as well. After all, you can afford it. So why not get the bigger apartment, nicer car, more services….. So here’s the thing….<\/p>\n
If you work for a company long enough, and perform well enough, you’re likely to get paid more.\u00a0 Managers typically try to differentiate compensation and pay for performance. Sometimes, managers will “spread the peanut butter” so everyone gets a little bit. Net net, it’s a lot harder to break someone new in rather than take care of a known quantity.<\/p>\n
Some folks I know accelerate their spending along with the increase in income. In some cases, it’s unavoidable (child care, elder care, etc).\u00a0 But where it’s truly discretionary, it’s a good habit to keep the spending belt tight.<\/p>\n
Just like a business, if you keep expenses tight, and your income goes up, your profit margin widens.\u00a0 And as you are able to keep more money, you can use that money for an emergency fund, to invest in a brokerage account, or pay down expensive debt.\u00a0 Having more money gives you more choices.\u00a0 And with the power of compounding, you have the ability to build a nest egg for the future.<\/p>\n
Keeping a spending journal and tracking my expenses and income on a\u00a0 yearly basis helps me keep the belt tight.\u00a0 Without those two things, it would be too easy to gradually spend more (another subscription service, more eating out, more expensive clothes) which don’t really enhance my lifestyle that much when I measure it against becoming financially independent.<\/p>\n
You won’t spend the same amount of money year over year…but you’ll eventually get to a level which is pretty much independent of how much money you make because you’ll have figured out what level feels right to you given your goals. Too often, I have seen people automatically ratchet up their spending in concert with their income, only to look back and regret it.<\/p>\n","protected":false},"excerpt":{"rendered":"
So as you get raises or bonuses, it’s really easy to start increasing your expenses as well. After all, you can afford it. So why not get the bigger apartment, nicer car, more services….. So here’s the thing….<\/p>\n","protected":false},"author":1,"featured_media":2931,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[37],"tags":[],"class_list":["post-2929","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-personal-profitability"],"yoast_head":"\n