I Discovered That Ambition Has a Price and It Comes Out of Your Savings Rate
Every time I increased my income I also increased my expectations of myself. The lifestyle expanded to fill the salary and the saving never got easier.
Story
What actually happened
I had been told that the solution to saving was to earn more and I had absorbed this as a reasonable operating principle. I was earning more at 27 in Dublin than at 23 and had expected, when I projected the logic forward, that the additional earning would create additional saving capacity. It had not.
The additional earning had created additional spending that was less deliberate and more ambient than any individual decision I had made. I was eating differently, living differently, socialising differently - not from conscious choices about what I wanted but from the natural inflation of expectations that tends to accompany the inflation of income.
I had the specific experience at 27 of earning forty percent more than I had at 23 and having almost the same amount left at the end of each month. The saving rate had remained approximately constant as a percentage while the nominal income had grown significantly.
The realisation arrived through a comparison with a university friend who earned less than me and saved more - not through greater discipline but through a simpler lifestyle that had not expanded with income in the same way mine had.
She had made a deliberate decision at 23 about what kind of life she wanted to live and had maintained that decision as her income grew, directing the additional income to saving rather than to lifestyle. I had not made a decision.
I had drifted, and drift had produced the lifestyle inflation that had consumed every income increase before I had the chance to redirect it. I made a deliberate decision at 28 about what percentage of income I was going to save regardless of what the income was, and committed to holding that percentage as income grew rather than allowing the lifestyle to absorb each increase.
The decision was structurally simple and required ongoing recommitment to be maintained. The net worth at 31 is considerably more reflective of my actual income history than it would have been without it.
The lesson
Actionable takeaway