9 Ways To Avoid Lifestyle Inflation With A Savings Plan

To avoid lifestyle inflation or lifestyle creep, we need to make a reasonable budget when we start our first job and throughout our career.

9 Ways to Use Our Savings – An emergency fund. – Set up a budget. – Spending limits. – Pay down debt. – Pay down student loan repayment. – Retirement savings. – We leverage the power of compound interest. – Diversify your investments.

Monthly Savings Should Be at least 10% Of Your Earnings

#1 Pay Yourself First Allocate at least 10% of your earnings to go savings and allocate to paying off debt, emergencies, retirement accounts, and investments.

#2 Establish An Emergency Fund Establish an emergency fund for at least six months of necessary expenses such as rent, student loan payments, transportation, utilities, phone, food (even pizza). You may be living on your own or with roommates, and they’ll be expecting your monthly contribution.

Put a budget plan in place once you know your take-home pay, you should think about your fixed and variable expenses. Keep your housing costs from expanding as you grow your family.

#3 Set Up A Budget

#4 Spending Limits Spend within your means by tracking and limiting purchases. The problem is that the new freedom you have to enjoy more things with your latest paycheck, the more likely you will spend more than you should.

If you are living home initially after college, that is a great time to put some savings away to pay off debt. Reduce your high-cost debt by paying your bills in full.

#5 Pay Off Debt

Have a plan for your student loan repayment. This has to be an essential part of your priorities. The Consumer Expenditures Survey may be underestimating education costs or in other categories.

#6 Student Loan Repayment

#7 Consider Increasing Your Loan Payments When you have extra savings or your income rises, pay down your student loans. You may decide to pay more than your current student loan bill if you get a bonus or substantial raise.

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