Comments on: Pay Yourself First and Avoid Lifestyle Creep https://www.mydividenddynasty.com/pay-yourself-first-avoid-lifestyle-creep/ Minimalist, Capitalist, Dividend Growth Investor. My Journey to Financial Freedom. Sat, 07 May 2022 01:12:39 +0000 hourly 1 https://wordpress.org/?v=6.9.4 By: My Dividend Dynasty https://www.mydividenddynasty.com/pay-yourself-first-avoid-lifestyle-creep/#comment-2392 Tue, 22 Jun 2021 22:50:41 +0000 https://www.mydividenddynasty.com/?p=1947#comment-2392 In reply to SavyFox.

Thanks SavyFox! You know what is funny, The Millionaire Next Door was actually the first book on finance that I ever read. It really got me started digesting these concepts. Great point about income increasing faster than the rate of increasing spending (Positive Jaws Ratio). 🙂

]]> By: SavyFox https://www.mydividenddynasty.com/pay-yourself-first-avoid-lifestyle-creep/#comment-2391 Tue, 22 Jun 2021 08:43:45 +0000 https://www.mydividenddynasty.com/?p=1947#comment-2391 Hi
Very good read! I heard/read about the concept of paying myself first some years ago in “The Millionaire Next Door” which was an eye-opener for me. Intuitively, we would save what is left after we pay with our income all kind of persons e.g. for groceries, insurances etc. As soon as we can turn that approach by starting with “what amount do I want to save each month”, it’s a huge change.
Lifestyle creep is something we all have to tackle, in particular if one wants to achieve Financial Independence. In my view it’s completely ok when spendings rise as long as income rises faster. The result is a so-called Positive Jaws Ratio. When costs grow faster than income, then it’s a problem (negative Jaws Ratio), leading to detoriationg proftitability of a household.
Cheers

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