Two Strategies To Tackle Lifestyle Creep for Young Adults Who Want to Grow Their Net Worth
It just feels so good: Using the additional money from the recent pay raise or a new side hustle and treating yourself for all the hard work you put in.
But if your spending always is on par with your income your net worth and financial leeway remain low and you might end up being one of every second American that is living paycheck to paycheck although making six figures.
Here’s how you can break this vicious cycle that keeps your fortune tiny:
Step 1: Save before you spend
Make sure to determine a savings goal for yourself — Let it be the down payment for real estate or a contribution to your retirement fund.
Decide on a monthly savings rate you can dedicate to that goal and put it in a separate account once your paycheck arrives. When you put some money aside before it hits your checking account, you likely won’t miss it anyway.
Step 2: Dedicate additional income to savings and checkings
Split up every increase in disposable income between your checking account and your savings rate. When you put 100% of your raise towards your savings, you reach your goal faster and as you didn’t have the additional money in the first place, chances are…
