Getting that promotion or raise that you’ve been actively working for is nothing short of rewarding. For many, the extra income can be the most exciting part, especially if you can finally afford to buy a new car, take a well-earned vacation, or even simply order takeout a little (or a lot) more often.
Although additional earnings could hardly seem like a bad thing at first glance, there’s danger in increasing your spending with your boost in income. Called lifestyle creep, the phenomenon of spending more as you earn more often happens with greater frequency until expenses that were once considered to be luxuries begin to feel absolutely necessary. Between retail therapy and trying to impress peers, that extra income can quickly disappear, leaving you back where you started or even worse off. To avoid the dangers of lifestyle creep, setting monthly financial goals, automatically transferring your raise to a savings account, and learning to treat yourself carefully can keep things from getting out of control.