Have you ever noticed how the more money you have, the more money you spend? It’s not just you. It’s a real phenomenon known as lifestyle creep, and it can sneak up on you if you’re not careful.
Lifestyle creep refers to the increase in a person’s spending as their income rises. While lifestyle creep is common, it’s also avoidable if you understand what it is, how it happens, and then make smart financial moves to create the freedom and flexibility you’ve always dreamed of.
What is Lifestyle Creep and How Does it Happen?
Lifestyle creep occurs when an individual’s income rises and as a result, so does their spending. They may have received a raise at work or taken a new job with a higher salary, and with the extra income, they begin spending money on discretionary, expensive items. People who experience lifestyle creep will eventually find that even though they make plenty of money, they are strapped for cash and living beyond their means.
Some increased spending is normal with lifestyle changes, such as having children or other family expenses. That is understandable. But there are many people who always fly first class, buy designer clothes, and/or own several expensive cars. These are the people experiencing lifestyle creep.
Some people think they deserve expensive things because they work hard– they are treating themselves. Or some feel they need to spend more to maintain their prestigious appearance and look the part. However, consistently overspending on unnecessary items is where the lifestyle creep begins.
How to Conquer Lifestyle Creep
Most millionaires don’t drive the shiny sports car or wear luxury watches. They’ve figured out how to avoid lifestyle creep. The “millionaire next door” probably drives an older car, which he’s paid off. He probably lives in a modest home and has paid off his mortgage. He’s figured out what to spend money on when it’s better to save and invest. Not only is he wealthier, but he’s probably happier, too.
Most of these people have income-producing assets, which is the secret to freedom and control.
People who experience lifestyle creep may be trying to fill a void, and it won’t work. It’s important to recognize what things really make you happy – like family, pride in your work, doing things you enjoy, and living a life where you have control, freedom, and flexibility.
So how do they do it? The best way to avoid lifestyle creep and achieve a lifestyle you are happy with is to make smart financial decisions, such as:
- Saving money
- Paying off debt
- Investing into businesses & real estate
- Living below your means
- Investing into cash flow-producing assets
- Diversification of investments
As your income increases, the amount of money you save and invest should, too. Once you’ve paid your debt, saved appropriately, and made revenue-producing investments, then you can wisely spend what’s left. Now you can enjoy the fancy toys!
Achieve Financial Freedom Through Franchise Investment
Franchise ownership can provide a steady source of cash flow, equity, and long-term financial stability, making it a great solution to lifestyle creep. Unlike a traditional job, where your income is limited to a salary, a well-established franchise can generate consistent profits, provide tax benefits, and diversify your streams of income.
You don’t have to give up your salary when you become a franchise owner. You have the flexibility to keep your job and salary to reduce your risk in the beginning. However, you may discover you prefer to be more hands-on. As investor Kevin O’Leary (Mr. Wonderful of Shark Tank fame) says, “A salary is the drug they give you to forget your dreams.”
The best part is that owning a franchise gives you the freedom and flexibility to create your desired lifestyle. You have the autonomy to set your working hours, choose the location of your business, and tailor your business operations. You are the boss! Franchise investment can help you strike a harmonious balance between work and life, and foster a lifestyle aligned with your goals.
Franchise ownership puts money back into your pocket and gives you the freedom to trade in your salary and go after your dreams.
It’s never too late to take control of your financial future. Start by exploring the world of franchise opportunities. A franchise consultant can guide you through the process and help you craft a roadmap toward financial success. Embrace the transformative power that comes with franchise ownership and live the lifestyle you’ve always dreamed of.
Reach out to learn more about how a franchise investment can help you conquer lifestyle creep and achieve financial freedom.
