Fighting Lifestyle Inflation: How to Save More When You Make More

Every time I get a raise (or let’s face it, even when someone finally Venmos me for drinks from two months ago), I feel like I’m in the middle of a music video, dollar bills flying around. I can say yes to extra guac! Yes to that pair of shoes I’ve been eyeing! Yes to the Snickers bar at the grocery store checkout! 

As tempting as it is every time I have a little extra cash, I know I can’t throw my savings goals away (and my adult priorities, like paying our mortgage) whenever I want. Fighting lifestyle inflation — the common phenomenon of increasing spending when income does — has been one of the most challenging aspects of being an adult. Here’s how you can stay true to your goals regardless of how much you make:

Practice gratitude

Each morning, I write down three specific things I’m grateful for, like going for a long walk, finding a tinted chapstick I thought I had lost, or friends who call me up on FaceTime. When I find myself wanting a new dress or hovering over “book” on a spontaneous flight to San Francisco (It’s only $100! Who cares that it’s at 5:30 AM on a Wednesday?), I take a deep breath and go back to my gratitude journal. It allows me to focus on all of the things I have, rather than the things I want — and can usually get the “Gimme! Gimme! Gimme!” voice in my head to calm down.

Use invisible savings

For every paycheck that comes in, I make sure to “pay myself” first. That means setting aside money for “rainy day” savings, paying the bills and mortgage, and putting money into retirement accounts. I set it up so that a percentage of my paycheck automatically gets taken out for my 401(k) each week, so I can operate like that money never existed. Create a 401(k) or Roth IRA to make sure you’re saving a little as you go — your future self will thank you!

Create multiple accounts for each goal

This is the grown-up version of having four jars with different destinations on them on my desk. Rather than have all of my savings in one account, I’ve set up a “Travel” fund to fuel my wanderlust and a “House” fund for our next home renovation, which are my two biggest savings goals right now. It makes it easier to track my progress and sets up some rules for how my money gets spent. And it gives me an easy check on any impulse spending — putting a real opportunity cost on any purchases I make.

Use percentages in your budget

As your paychecks grow, it can be tempting to start spending more on non-essentials. That’s why I use percentages for my budget instead of raw numbers. It’s a subtle difference that means I’ll always be saving 30 percent of my income before I even think about the fun stuff.

Challenge yourself to a no-buy year (or week, or month!)

I challenged myself to a no-buy year for 2020, and while that sounds scary, it’s just another way for me to keep laser-focused on my savings goals. What it really means is evaluating every purchase I make, and taking the time to ask myself, “Why do I want this?” It also means swapping out things for experiences, which I value over material items and things, so even if I’m still spending money, I’m doing things that bring me joy. 

Donate or volunteer more

The best part about a bigger paycheck is that it opens up more opportunities to help others. I try to budget in about 10 percent of my budget for donations to organizations I’m passionate about, but I’ve also given myself permission to spend more where it matters, like buying books from independent booksellers. And it’s always worth reminding myself that volunteering my time doesn’t cost a dime.

Originally on published March 1, 2021.

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Kayla Voigt hails from the small town of Hopkinton, MA, home of the Boston Marathon. A marketer by day and freelance writer by night, she's a passionate storyteller, reader, hiker, swimmer, runner, and eater. Like what she has to say? Subscribe to her blog or say hello on Twitter.