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Aina, 27, works in KL. Six months ago, her salary increased from RM3,500 to RM4,000.

She started taking Grab more often, bought a phone on instalments and joined a gym.

Then came another streaming subscription and more food delivery.

Now, she earns RM500 more each month. Her savings? Still the same.

That's lifestyle inflation, when your spending rises along with your income, leaving little extra to save.

Small upgrades, bigger bills

Also called lifestyle creep EN: lifestyle creep A gradual increase in spending as your income grows. "Lifestyle creep left me earning more but saving the same amount." BM: peningkatan gaya hidup , it usually happens gradually. Each purchase feels reasonable, but together, they become a new monthly routine.

Here’s what Aina’s monthly upgrades could look like:

  • More Grab rides instead of the LRT: RM200 extra
  • New phone instalments: RM150
  • Gym membership: RM120
  • Another streaming subscription: RM30
  • More food deliveries: RM180 extra

That’s RM680 more a month, exceeding her RM500 raise by RM180, even before salary deductions.

To cover the gap, she’ll need to cut back elsewhere, save less or borrow more.

Why do we fall for it?

The excitement wears off.

A new phone feels exciting at first. Eventually, it becomes ordinary, and another upgrade starts looking tempting. This is known as hedonic adaptation.

We compare ourselves with others.

A colleague buys a car. A friend books another holiday. Suddenly, you feel pressure to catch up, even if those purchases don't fit your budget.

Instalments make prices feel smaller.

RM100 a month sounds easier than RM1,200 upfront. Stack several payments together, though, and your future salary is already partly committed.

Is spending more always bad?

No. Earning more should give you room to improve your life.

Moving closer to work, for example, could save commuting time. A gym membership might be worthwhile if you use it regularly.

The problem starts when upgrades leave little room for savings or make your monthly commitments difficult to manage.

Watch how much you keep

Your savings rate EN: savings rate The percentage of your income that you save. "My savings rate increased after I cut a few monthly expenses." BM: kadar simpanan is the percentage of your income that you save. For everyday budgeting, use take-home pay EN: take-home pay The money you receive after deductions such as EPF contributions and tax. "I plan my budget around my take-home pay." BM: gaji bersih consistently.

For example, if your take-home pay rises by RM400 and you save RM200 of it, you're putting away an extra RM2,400 a year, while still having RM200 more each month to enjoy.

How to keep lifestyle creep in check?

Save before you spend.

Decide how much of your raise to save, then set up an automatic transfer on payday.

Try splitting the increase.

Putting half towards savings and half towards spending can be a useful starting point. Adjust it to your needs and existing commitments.

Check recurring payments.

Subscriptions, instalments and memberships add up. Before taking on another payment, check how much of your monthly income is already committed.

Choose upgrades that matter.

Spend on things that improve your daily life, instead of upgrading everything just because you earn more.

Aina doesn't have to stop enjoying her salary. She just needs to give her savings a share of the raise.

Think about your last pay rise. Where did the extra money go?