DANGER SIGNS

● Increased spending without a change in your needs. If you’re spending considerably more than a year ago, but your needs or circumstances haven’t changed that much, it could be a result of lifestyle inflation.

● You regularly upgrade your car and gadgets and neglect savings, especially for retirement. This will prevent you from taking advantage of compound interest to build wealth and could make life very difficult for you later.

● You’re relying more and more on debt. If you consistently use

credit cards or loans to maintain your lifestyle, it’s a red flag, warns the debt counselling company DebtSafe. Using debt to sustain a higher standard of living will lead to financial instability.

● You live from one pay day to the next. This can happen at all different income levels and could be a sign that you’ve overcommitted yourself financially. Some people earn a large salary, but because their lifestyle, they can barely cover their necessary expenses every month. These things can keep you trapped.

● Comparing yourself to others. If you feel under pressure to be accepted in a certain social group, you may end up spending more than you can afford to keep up with their lifestyle. Meanwhile, the so-called Joneses could be deeply in debt and trying to keep up with someone with an even more extravagant lifestyle.

● A lack of financial education. If you don’t really understand the importance of saving and budgeting, you could be more susceptible to lifestyle inflation, DebtSafe warns.

● Emotional fulfilment. This is when spending money gives you such immediate pleasure that you end up buying on impulse to feel good. improve your current property so when you sell it you will get a higher price, compared to buying a bigger house now. Have a close look at your motivation for wanting to upgrade your lifestyle and what the consequences might be.