Income Irony

One thing I'm struck by is that making more doesn't necessarily mean you're Getting To Enough more quickly. The problem is that as we make more, we spend more and quickly get used to that new level of spending. This increasingly raises the amount that we "need" in order to support our lifestyle, which raises the amount that we need to have saved up in order to support that lifestyle when we no longer have our main source of income (usually our salary). In this case, compounding works against us.

Jean Chatzky comments on this in her Money Tip of the Day. Her suggestions on how to keep spending in check are to monitor it (by using something like Quicken) and to have goals. As she puts it, "the easiest way to say no to that new pair of shoes is to know that you need the money for next month's vacation in Florida or next year's tuition bills."