Lifestyle creep…

One great advantage we have as a local advisory firm is to see many different households navigate their lives financially.  We often see commonalities that are almost totally predictable.  For instance, most families’ lifestyles adapt very rapidly to whatever income they are making.  Take for example, if a family lost significant (or all) income through the last great recession but has steadily recovered that income  in the last 12-24 months --- they most likely are not saving any more now than they were in 2008-09.  Think of that…a family could be making 50% + more of income and their consumption habits (or pent up demands) exacts the excess income.  The wise family manages their baseline spending very well and allows for “planned” splurges when desired, but does not let their baseline needs creep (with income appreciation) such that they HAVE to now make 110% of last year’s income just to suffice the lifestyle.

Food for thought….Success to you!

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