I spend a lot of time with Budge members talking about debt and one thing is certain, making more money doesn’t always lead to getting out of debt:

You can grind as hard as you want, but if your expenses increase, it will be just as hard to get out of debt. Many people fall into this trap. 

A simple example of why lifestyle creep can destroy your ability to get out of debt:

Sarah is working to pay down her debt and gets a $1,000/month raise. As part of that raise she takes out a car lease for her high schooler at $300/month. She should still have extra money to put towards her debt, right? Wrong.

• After tax, Sarah is netting $650/month. 
• She put $300/month towards the car and her insurance increases by $100/month for a new car. 
• She is now down to $250. 
• Part of the car lease required $2,000 down. 
• Unless she had the $2,000 set aside, It would take 8 months of her remaining raise to recover the $2,000 she pulled from her bank account. 

Finally, after the 8 months of recovering the down payment, she will finally have $250 per month from her raise to put towards her debt. But guess what? She probably also increased her spending for herself as well, and the debt cycle continues. 

How to avoid lifestyle creep:

I’m not going to be the doom and gloom financial coach that says you can’t have nice things when you are working to get out of debt. Let’s be reasonable here! 

If you want to celebrate making more money, treat yourself without committing to new monthly expenses. For example, if Sarah spent the first month of her after-tax raise towards a weekend adventure with the family for $650, she would still have $7,150 ($650/month X 11 months) for the rest of the year to put towards other things.

Alternatively, if she wanted to get a car for her son still, she could have saved the $650/month for a year and would have had enough to get her son a solid used car. After she buys the car outright, she would be able to put the savings from not having a car payment towards he financial goals.

Budge provides you with a surefire way to make sure your new income goes towards your debt.

If you are the type of person like many of us who suffer from lifestyle creep, we have a solution. With Budge's money automation, you can have money go directly towards your debt on payday so its out of your hands and towards your goals. Join now for a free trial.