Mo Money, Same Problems
19-Nov-2020 • 6 min read
Let’s face it - typically as young adults we are only just getting used to having some money to our name. Whether it’s from our first salary, a side hustle or even student finance, having that first bit of cash can have you feeling like Jeff Bezos.
When we earn more money, many of us are inclined to spend more - this is called lifestyle inflation. It’s when we raise our standards of living as our income increases, such as going out to fancy restaurants, upgrading to a nicer car, getting the latest iPhone and countless shopping sprees - after all, we deserve it right?
Whilst there’s nothing wrong with treating yourself occasionally, it can be very easy to find yourself still having to scrape for cash (yes, even when having more money). Many of us think that our problems will disappear as soon as we make more money but truth be told - it doesn’t work this way. As the saying goes ‘If you can’t manage £1,000, you won’t be able to manage £10,000’ and so on. At the end of the day, it all comes down to how you manage your money no matter how much you have - so let’s break down some tips on how you could try to avoid this common financial mistake.
Stop and think - what do you have to prove?
As much as we hate to admit, we live in a society where we always feel pressured to prove our success, usually through materialistic things to show off what we can afford. Ironically, when we look at some of the richest people on the planet, they aren’t dressed in designer clothes head to toe. So next time you’re about to splash £500 on a Gucci t-shirt just to get a couple of pics for the ‘gram - stop and think to yourself what do you have to prove?
Stop keeping up with the Joneses
We’ve all heard this saying a million times - but it’s totally true! We must remember that Instagram isn’t reality, a lot of the time we don’t even know what's going on behind the scenes (trust me, a lot of people go above and beyond for Instagram). So remember, when you see someone #livingmybestlife, don’t get disheartened at your financial situation and worst, don’t spend your money trying to keep up with them and their lifestyle! And (just a PSA) the unfollow button is free! Unfollow those who make you make you feel this way.
Set yourself a newly adjusted budget
Budget!!! And budget accordingly - setting a new budget for your increased income is vital as many of us will see a larger sum of money than we’re used to and class it as ‘extra money’. Instead, the best thing to do in this situation is to give purpose to your new money - whether it’s to contribute to your savings, increasing your repayments or money to invest in your start-up business. Whatever it is, knowing that the money has a purpose should refrain you from spending it on random purchases.
Be held accountable
Being held accountable is crucial to reaching any goal you set for yourself. Whether it’s having a friend who will check you - and we mean check you, or holding yourself accountable though this takes a lot of self-control, it’s worth having that voice to tell you when you could be making an unwise move with your money.
Think about the bigger picture
Never lose sight of the bigger picture! You’ll thank yourself in years to come that you stayed loyal to your financial goals. When tempted to splurge on the latest designer purchase to flash on the gram, think to yourself - ‘is this contributing to my financial goals, could I be using this money for something more worthwhile?’ Think long term and make the sacrifices now which you will reap the benefits of later down the line!
While it’s easy to let your lifestyle and spending spiral out of control when you have the money available, be conscious of your goals and how much you upgrade your lifestyle - there’s nothing wrong with treating yourself now and again. Try to be strategic with the way you spend so that it all corresponds to your end goal.