How to avoid 'lifestyle creep'

Pocketful of Dirhams

Consider this: You’ve just received a promotion and a pay rise at work. But what plans do you have for that extra money? Will you save it – or will you spend it? For some, saving is the obvious way forward because they are happy to live within their means on their old salary and anything extra is a bonus to secure their financial future. But for many others, the temptation is too great and they see the extra money as an excuse to pay for items they couldn't afford before. Examples could be taking out a loan to buy a fancy new car that you don’t need or upgrading to a larger, more expensive apartment.
This is known as lifestyle creep – or lifestyle inflation. As the phrase suggests, it can creep up on you before you realise that you’re living beyond your means and constantly need more promotions and pay rises just to keep up with your rising financial responsibilities. But how do you avoid lifestyle creep and keep your financial goals on track?
Host Felicity Glover is joined by Carol Glynn, the founder of Conscious Finance Coaching, who offers her advice on the best ways to prevent lifestyle inflation creeping up on you.