Do any of the following thoughts ever cross your mind as you are preparing the monthly bills? How did your friend get a new job with a 20% pay raise? Wasn’t she almost fired last year? When is your manager going to move on? You are certainly more qualified. Whatever happened to the move up or out policy? Your debt has gotten out of control. You need more income. Why should you struggle each month living pay check to paycheck? It’s time for a change?

Now think back to your last large pay increase. Are you better off today than you were before the increase? Of course you are. You have nicer stuff. May be you are living in a larger house or finally purchased your dream car. You take a winter and summer vacation. Your kids are in private school. If you are better off, then why are you still struggling from month to month? A higher paycheck translates directly into a more expensive lifestyle. My wife and I vacationed in Hawaii a couple of years ago. One morning at breakfast while overlooking the most spectacular ocean view I had ever seen, my wife stated that she needed a vacation like this every year. I said that you would like to have a vacation like this each year. She replied, “No, this is a need.”

As your paycheck increases, so does your NEEDS. The bottom-line is that people that overspend on a modest income will usually find ways to overspend on a higher income.