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Even high-earning individuals have finite resources, Johnson said.
One must create a budget and prioritize how to spend those finite resources.
But what about spending on things that arent necessities?
Johnson explained that what one person might see as wasteful, another may see it as perfectly rational.
But, for some people the daily coffee purchase provides them with a lot of utility.
For others, it can simply be a habit that can be eliminated.
Individuals are unique and what brings one individual pleasure is different than what provides pleasure to another.
The key to budgeting is to recognize that and to take that into account.
People will remain poor if they dont budget for savings and then invest those savings.
It should be a line item on your budget.
You dont successfully build wealth by simply taking what you have left after all your expenses.
We accomplish what we prioritize.
Prioritize savings and invest those savings.
As income rises, spending habits frequently rise faster, he said.
Luxury vehicles, frequent upscale dining and lavish vacations can quickly dwarf income.
Tigner added that the way to avoid lifestyle inflation aka: lifestyle creep is to live below your means.
While well-intentioned, this can lead tosignificant financial leakageif not managed carefully.
This can help you manage the emotional pressure to spend without derailing your financial health, he explained.
This reduces dependency on a single source and adds financial security, he said.
Mullins pointed out that as your financial situation evolves, so should your financial plan.
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