When you earn more, you spend more (taxes, increase, income)

[hershey48]

In general is this really the case?

I guess I could see people thinking I'm making more let me treat myself to xyz.

I think my experience may be different from a lot of you here because my income hasn't increased much in the past few years so I'm not spending more. I don't own a car. Have no debt. I try to live within my means.

Sometimes I wonder when I make more will I be more inclined to spend more? I'm saver, sometimes to a fault.

I think I would still be frugal and always looking for coupons, deals, etc. I never like to spend more than I need to.

Thoughts?

[ragnarkar]

From my observations, even among frugal people, this rings true. I, however, will try to save a constant % of my take-home pay. If my income increases, I will treat myself under the constraint that I will still save the same proportion of my income as before.

[brocco]

yes but not at a 1:1 ratio (for me anyway). i spend more but i also save more

[oneasterisk]

Originally Posted by brocco

yes but not at a 1:1 ratio (for me anyway). i spend more but i also save more

I'm with you. I just commented to another thread about this. My income has increased, but there's a point where my spending didn't expand. Don't get me wrong, I could have easily buy a bunch of "stuff" but instead I increased my retirement contributions and asset accumulations.

My friends that make less than me buy way more junk than I do. Seems they're always buying a new phone, car stereo, video game system etc. I guess someone's got to stimulate the economy...

[CSD610]

That is purely a personal choice, we earn more than we did 5 years ago but do not spend more and honestly we spend less per month now than we did before. We have changed the way we do things though as far as finances go from 10 years ago when we first got together.

[Pitt Chick]

When we earned more, our spending DID go up.
Taxes are higher, tithing takes more $$, and we invest more.

Other expenses stayed about the same.

[Lacerta]

I agree with others. When my income goes up, I might treat myself, but I also start saving much more. My lifestyle does not increase to match my new income, but I may indulge in a few one time expenses.

Case in point: My husband was out of work for nearly a year a few years ago during the height of the recession. We got by on one income, but held off buying anything that wasn't a daily necessity. Once he went back to work, we paid off all our debt, and then bought a new TV, entertainment center, and couch. They weren't completely necessary, as ours were all still functioning, but they were all 10+ years old, and we wanted new. But since then, we haven't splurged on anything, and have saved a lot.

[Sunbather]

Like other people have said:

Yes my spending has gone up but not at a 1:1 ratio. My savings and investments have increased MUCH more than my spending as my income grew.

[Coldjensens]

Part of the reason is that your time becomes more valuable to you. Thus, you are less likely to work on your own car, carve your own ham or beef, mow your own lawn, clean your own house. Also frequently you earn more by working harder. Thus you simply do not have time to do the chores and you hire people to do them for you.

Further I cannot see anyone not spending some more when they earn more, otherwise what is the purpose of earning more? earn more just to save more? Save for what? How much do you need to save? Saving is fine and danady, but I see people who live frugally their whole lives and just save and save and save. Yes they can retire early, but usually they do not, because if they keep working, they can save even more! Finally they die having never lived and their kids or grandkids or some unknown relative spends all the money in six weeks.

[Sunbather]

Originally Posted by Coldjensens

Part of the reason is that your time becomes more valuable to you.

Completely agree. I view more money as giving me more time more often than giving me more THINGS.