Money & WorkMental model

Why a pay rise often doesn't make you richer.

Lifestyle creep is the effect of spending growing along with income: bigger flat, better car, pricier restaurants. What used to be luxury soon feels like a basic need. If you go from €2,000 to €2,500 net and spend €500 more, you save exactly as little as before. The balance stays the same; only the fixed costs are higher.

Useful: With every pay rise, move at least half of the increase straight into savings by standing order.

Source: en.wikipedia.org

Konsum Psychologie Sparen

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