Dubai: Earning more is great, but if your spending habits grow just as fast, you could end up broke despite a higher income. Here's how to fight back against lifestyle inflation and build real wealth. Are you letting lifestyle inflation sabotage your savings? Lifestyle inflation happens when your spending increases as your income rises.
Sure, it feels good to reward yourself after a promotion or a big raise, but if every extra dirham is spent, your savings and financial stability might not improve at all. Common triggers for lifestyle inflation include graduating from college, landing a new job, or getting a raise. And while more money in the bank is worth celebrating, it’s easy to find yourself in the same financial spot as before - struggling to save and feeling stretched thin.
The truth is, whether you’re earning Dh20,000 or Dh200,000 a year, it’s how you manage your money that makes the difference. While a bit of lifestyle inflation is natural, being mindful of your spending decisions today can significantly improve your financial future. Here are five practical strategies to help you avoid lifestyle inflation and keep your financial goals on track.
1. Track every dirham you spend One of the sneakiest things about lifestyle inflation is how it creeps in through small, everyday choices. It might start with a daily coffee upgrade or a few new subscriptions.
To combat this, keep a close eye on your spending. Consider every purchase—is it genuinely adding value to you.
