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Speaker 1: Hi, I'm Stacey Hyde
and I'm back with another

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episode of Better Financial
Health in 15 minutes or less.

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And today I'd like to talk
about something I call lifestyle

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creep.

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You got the big raise, you got
the new car, but at the end of

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the month there's still almost
no money left.

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Where did it go, and how does
this, and what can you do about

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it?

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So lifestyle creep is when,
slowly, over time, you maybe

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start not bringing your lunches
often, so you eat out more or

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you meet friends for drinks, but
instead of going to somebody's

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house, you're going out to a bar
but now it's not the corner bar

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, it's this nicer bar in this
fancy restaurant and sometimes

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you're hungry, so you stay and
have dinner, or you order

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takeout or meal delivery
services multiple times a week

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instead of going to the grocery
store, and so all of those

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things add up.

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Or maybe, instead of taking the
budget-friendly all-inclusive

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vacation or going camping,
you've gone to you know a much

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nicer resort and you've upgraded
your plane ticket, because who

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doesn't want more leg room and
to make sure that they can get

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their bags in the overhead bins?

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Been there, done that.

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So that type of spending can
really erode your savings and

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impact your long-term goals and
it can cause you to have a

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paycheck to paycheck lifestyle,
even making six figures.

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I was talking to a friend the
other day and she was like man,

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I need a financial planner.

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And I started asking her.

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She goes oh, I know, we spend
what'd?

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She tell me, a couple of
thousand dollars a month on meal

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delivery services.

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I was like, oh, wow, so that's
you know.

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And she didn't really even seem
willing to cut back on that.

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And that's really the first
step is being understanding

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where it's going.

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She understood that, but she
wasn't ready to make a change.

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And so, in order to have a
better life in the future, for

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future you, you have to make
some changes today, and it's

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really not any fun to live
paycheck to paycheck.

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So what you want to look at
when you look to see what's

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going on she obviously had done
this are your expenses rising

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faster than your income, and
that can be easy today with

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inflation and the tariffs and
things like that going on.

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And you want to compare.

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Pull out or go online, as most
of us do, and pull an old credit

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card statement from two years
ago, pull an old bank statement

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from two years ago and compare
what your expenses are today

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versus what they were then, and
a lot of the streaming services

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have had, um, quite a bit of
increases and if you're not

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using them all, you may want to
cancel them.

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I know some people that they'll
have netflix for three months.

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They'll watch all the stuff
they want, then they'll get

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apple for a couple of months,
watch what they want there and

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then, and they kind of cycle
through them so they never have

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more than one at a time.

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And then you know, I think
we're all addicted to our amazon

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prime for not just the movies,
um, but also the free delivery.

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Or, as my husband likes to
point out, it's not free, we're

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paying for the included delivery
services and I think that is a

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good distinction to look at.

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But what you want to think about
is sort of the um 50-30-20 rule

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and anytime you get a raise,
you really want to limit the

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lifestyle piece to 30% of your
raise, or if it can be less,

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that's all the better.

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I was actually telling my
daughter and son-in-law that the

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real key to building lasting
wealth is to not raise your

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lifestyle every time you got a
raise.

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If you were comfortable at one
level, just stay there and then

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you can take that money and
increase your savings, increase

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your 401k at work, add more to
your Roth IRA, but don't forget

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to put that money in your
savings and set it aside.

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No, it doesn't have the
potential to grow as much as

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stuff that you put in stock, but
it's there if you need a new

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car or you have a repair on your
home or something else, or you

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have an unexpected medical bill
bill, because, let's be real,

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out-of-pocket payments for
medical expenses can really add

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up quickly, so you want to make
sure you're prepared for that

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too.

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So the challenge I want to ask
kind of ask you to try out today

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is, the next time you get a
raise, really be deliberate

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about where you spend that extra
money and make sure that it

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really has a nice impact for you
.

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Or what you could even do is
take the raise, don't change

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anything for a month and see how
it feels to have that extra

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money in your bank account.

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Don't let it just sit there in
your regular checking account,

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though, because that's not gonna
going to earn you anything.

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You want to make sure you're
transferring it to a high yield

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savings account, a money market
account or to fund some of those

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other longer term goals.

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So, and the key thing to keep
in mind is that real wealth does

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not come from making more money
.

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It comes from keeping more
money and, at the end of the day

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, your future self will thank
you for keeping more money today

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, and it will grow over time,
even if it feels like for a

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while that it's not making that
much difference.

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I promise you the power of
compound interest will work for

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you over time.

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Thanks for tuning in.

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This has been another episode
of Better Financial Health in 15

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Minutes or Less.