Nov 21, 2016
#52: Imagine transitioning from making $8.50 per hour and
sharing a crammed apartment with 5 people, to becoming a
six-figure business owner doing what you love.
That's the journey that Julia Kelly, caricature
artist and founder of JK Expressions, took.
Sounds great, right?
Well, as they say, more money = more problems.
When Julia earned $25,000 - $30,000 per year, she had fantastic
money management skills. She had no debt and plenty of savings.
But when her business started making six figures, she began
ignoring her finances, stopped saving money .... and racked up
thousands in personal credit card debt.
Why?
Some of us write this off as life getting more expensive
as we get older, but it's actually a classic case of
lifestyle inflation -- when you make more, you spend more.
After Julia began earning six figures, she decided she was no
longer happy with $12 haircuts from Supercuts. She happily splurged
for $75 salon style cuts instead.
She started paying for convenience. One-click Amazon order? Check.
Ordering an Uber or Lyft so she didn't have to deal with parking at
the airport? Check. Eating out? Check.
She became lazy about saving money, assuming that she could always
earn more. Money was coming into her bank accounts at an
unprecedented pace – so her finances would take care of themselves,
right?
Wrong.
As Julia discovered, when you "upgrade" certain aspects of your
life, you may find it difficult to downgrade. You keep spending
more and more, trapped on a consumer treadmill. You’re forced to
work to fuel your spending addiction.
Left unchecked, this saps every ounce of freedom from your
life.
Ouch.
In this episode, you'll learn:
· Why you shouldn't take lifestyle inflation lightly
· How to stop lifestyle inflation before it happens
· What Julia regrets buying … and what she doesn’t
· The easiest, most effective antidote to lifestyle inflation
· How Julia differentiates between saving time vs. wasteful
convenience spending
· What Julia's advice is to those who are increasing their income,
but don't want to succumb to lifestyle inflation
-- Paula
Resources Mentioned:
• Gretchen Rubin's
episode, The Power of Habit Formation
• Julia's story on the Afford
Anything blog
• Cal Newport's
episode, The Incredible Value of Deep Work, Instead of
Distraction
• Julia's
site, JKExpressions.com
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I also want to take a moment to thank the sponsors for this
episode.
First, huge thanks to Nerdwallet. Their new app lets you have
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You'll get personalized, one-on-one advice -- available at no
cost to you. Check it out at no cost to you by visiting
nerd.me/paula.
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to read or refresh my memory of their books.
Sitting down to physically read the books can take a long time.
That's why I listen to their audiobooks, thanks to
my subscription to an audiobook service called Audible.
If you want to give them a try for free, head to audible.com/trynow for a free 30-day trial.
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For a full list of show notes, visit http://podcast.affordanything.com/52-how-to-combat-lifestyle-inflation-with-julia-kelly