The article warns young professionals, particularly those in lucrative roles like mortgage brokers, against succumbing to 'lifestyle creep'. While it's tempting to spend newfound earnings lavishly, saving and investing are essential for financial stability. Economic fluctuations can occur unexpectedly, making it crucial to build a financial cushion. The piece emphasizes that indulging in higher spending can lead to significant debt issues, putting high earners at risk of a paycheck-to-paycheck lifestyle despite their earnings. Long-term financial planning is essential to weather economic storms and ensure sustainable wealth accumulation.
Undoubtedly, giving into "lifestyle creep," a phenomenon whereby spending increases with money that comes in, can be the formula for disaster once the tides turn.
I do think that forming a padded cushion of emergency savings and other investments is the best move.
It's tempting for fairly young financial overachievers to spend all the cash flows that are coming in, but careful preparation for turbulence is wise.
More income can mean more access to debt and hefty interest payments that could keep one living paycheck to paycheck even with a high six-figure income.
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