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If you suddenly were making a lot of money (nothing crazy, say 100k a year) would you try to live wealthy or would you not change much from how you live now?
For example: If you make 50k a year now and use 45k so you have 5k savings, would you still spend around 45 to 50k a year even if you made 100k? That way you would have huge savings since you are living like you're "poorer" than you really are.
For those of you that are pretty wealthy already, how do you budget your money? Do you "live up to your income" or do you live like somebody who makes much less?
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It would probably increase a little bit for me, but not proportionate. Say if my income doubled, I wouldn't double my expenditure. I'd likely use the money to increase my savings or invest in the stock market, etc.
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True. Like for me, I'd maybe eat out a little more and spend a little more on entertainment/leisure. For most it probably wouldn't double, but some people are weird. They'll spend $20-25 for a meal on a routine basis if they can afford it. Or maybe they'd get a new home with double the mortgage payment (or rent).
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[quote quote=596]If you suddenly were making a lot of money (nothing crazy, say 100k a year) would you try to live wealthy or would you not change much from how you live now?
For example: If you make 50k a year now and use 45k so you have 5k savings, would you still spend around 45 to 50k a year even if you made 100k? That way you would have huge savings since you are living like you’re “poorer” than you really are.
For those of you that are pretty wealthy already, how do you budget your money? Do you “live up to your income” or do you live like somebody who makes much less?[/quote]
From my experience and observations, I think that those wealthy people normally have this problem of not knowing how to save and spend because of having excess money at their disposal. This sometimes puts them into sudden and unexpected debt but their financial power is equal to the task. With just one call to their account officer, and everything would be sorted out.
But when it comes to myself, I live, spend and save according to my income because there is no tree which I pluck money from. Should I be extravagant with spending, I'm still going to be the one to suffer for it because have no body to aid me should I find myself in a tight corner.
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It's a normal thing for people to get all frenzy when they have a swell in their income. I just don't know the reason for this but it's just how it is with most people. Personally, I'm not the kind of person who gets into too much spending when I have a sudden influx of fund because I have this kind of mind for always investing, so should my income level doubled or tripled, the very first thing that comes to my mind would be the best way to invest it rather than spend it.
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I spend based on my income and not outside it, when you have a fixed income and lots of responsibility to take care of, you are definitely going to rely on the careful spending on that income in order not to exhaust it before another one comes, otherwise you are absolutely guaranteed of being in debt and serious wanting.
So living like this makes me to work with my income in order not to have lots of spilled out debts hanging around my neck. One thing I have known about still being alive is that whether you have money or not expenses are definitely going to be taken care of.
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As long as I am concerned, I don't think that having an increase in my income will make me to increase my expenditure. The thing with having that extra income is that I like to invest with my income and the need to plan for the future. One good thing about having an increase in income is that we should look at a way to plan for a better life in the future. Living a good life and extravagant life at the moment is not nice as we have our family that we should take good care of in the future.
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I believe in creating a balance in everything, the should be a line between being a miser or just being stingy even to one's self.Saving is good but not to the detriment of one's well-being and healthy living.The whole essence of struggling and working so hard will be defeated if we don't live well even with all the money we have.Personally I create a balance,I wouldn't save to hurt myself and I wouldn't spend foolishly.A little spending and saving.if possible it could be a 50:50 balance or better still 60% spending and 40% savings.
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If I earn double what I used to earn, there's no need for me to really spend more than I already. Well maybe I will be able to afford a little extra stuff but I won't do any major change in my spending routine.
By doing so, I would be able to save much more money for the bigger plans in life. I honestly think it is just a wise decision that anyone can take.
