First paycheque trap: how to outsmart lifestyle creep

LANDING your first job and watching that initial salary clear into your bank account is a satisfying milestone.

- ANRI ARMER

After years of studying, budgeting on a shoestring, and relying on family, your first paycheque represents ultimate freedom.

It is entirely natural to want to celebrate. You might want to upgrade your wardrobe, treat your family, or finally buy that car you've been eyeing. But this point is where many young South African professionals fall into a subtle, wealth eroding trap known as lifestyle creep. Lifestyle creep also referred to as “lifestyle inflation” is the habit of gradually increasing your spending as your income grows.

When you get a promotion or a raise, your baseline for what you consider a necessity shifts.

The shared flat becomes a luxury bachelor pad; the second-hand hatchback becomes a more expensive car; and streaming subscriptions start to multiply. Before you know it, although you are earning significantly more, you are living paycheque to paycheque.