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Today, recessionary fears are on the rise again.
But despite this reality, Americans are still spending money.
The average Bank of America customer has more money in their account today than they did pre-pandemic.
But, the summer months have indicated a change in spending habits.
This indicates a focus on lifestyle rather than on necessities.
But on the other hand, they are spending a little bit less.
And youre seeing corporations cut prices to respond to that.
And so its the way the economy works, and its slowing down.
Heres why thats dangerous for your finances.
Why Its Important to Avoid Lifestyle Creep
A focus on maintaining a lifestyle ties directly intolifestyle creep.
This happens when you start spending more as you earn or have more money.
More of your money goes towards keeping up with an inflated lifestyle.
However, if youre not careful, higher spending in frivolous categories can land you in debt.
Its crucial to set aside funds for necessary expenses first while also allocating funds toward saving and investing.
Spending to maintain a lifestyle and keep up with the Joneses should never jeopardize your financial security.
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