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Why Are You Spending More Money After a Pay Increase?

Budgeting, Money, Wealth | December 11th, 2008 No comments

You got the promotion, new office, and the perfect assistant. Your plans and dreams are coming to together – and with it – comes a nice salary increase. You haven’t even received your first paycheck, and you’ve already spent the money. We’re talking new house, wardrobe, cars, home improvements, vacations, and the list goes on. You can finally have everything you’ve ever wanted. But if you’re not careful, you can easily burn through the extra money and find yourself broke. With most people thinking of how to hold onto their job, if you’re lucky enough to get a pay increase, you may want to think long and hard about what to do with it.

Our Need To Spend

I don’t know what it is about the human psyche. Even when we have everything we can possibly need – we always want more. And having additional cash in our pockets gives us an excuse to spend money. I’m guilty of this. But, unlike some people, I recognize the problem and I do everything in my power to keep life simple. With that said, I fight the urge to buy a new car every day, and I think twice before making mundane purchases. But as I look around and observe others, I realize that many people aren’t as content or interested in keeping their life simple. They spend money just because they can; and when the money well runs dry, they sit back and whine

Stop Spending What You Don’t Really Have

I can’t feel sympathy for people who literally shop til they drop. I often wondered how someone can earn a ridiculous salary and still complain about money. But after watching a recent episode of Suze Orman, I think I discovered the answer. And it all boils down to one simple concept: the more money we make, the more money we spend. A savvy person takes the extra income from a new job or promotion and puts the money to good use. They might pay off debt, make home improvements, and even splurge a little. There’s nothing wrong with this. You work hard. Therefore, it only makes sense to enjoy the money.

But some people take it to a whole new level. They can’t enjoy the money “a little bit.” They have to go all out and gratify every whim. They’re no longer satisfied with their current car or house. No, they have to purchase a more expensive model and buy a bigger home. Next, they have to furnish the bigger and better home. And naturally, they want to show off the home, which means they have to build an outdoor entertainment area, put in an in-ground pool, and do whatever it takes to “wow” their guests. Before they know it, the money train has crashed and they’re singing the blues.

Why live at your max? When you can live simply with style!

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