Do you upgrade your lifestyle every time you get an increase or promotion at work? After all, who doesn’t want nicer things and more luxury conveniences.
Signs of upgrading
If you can answer yes to several of these, then you could be in danger of experiencing lifestyle creep.
Lifestyle creep, the silent killer of pensions, is when as you earn more, you upgrade your lifestyle and spend more. You increase your spending but unfortunately not your savings.
This could lead to your retirement savings or emergency fund savings not being sufficient. If your monthly expenses increase and you don’t increase your retirement savings, you might not have enough to afford the lifestyle that you currently lead when you retire. This could see you downgrading your lifestyle at retirement.
It is important to increase your savings in relation to your expenses or try to avoid spending more when you get an increase.
If you suspect that you are falling victim to lifestyle creep, chat to your adviser immediately to help you get your finances under control and re-evaluate your savings strategy. [email protected]
Please note, the above is for education purposes only and does not constitute advice. You should always contact your deVere Acuma adviser for a personal consultation.
* No liability can be accepted for any actions taken or refrained from being taken, as a result of reading the above.