Lifestyle inflation is holding many people back from getting their financial house in order. This is because as your income increases, it becomes tempting to spend more. Check out this article for a few tips on how to avoid wasting away all your added income.

It starts small. At first, you find yourself debating the benefits of name brand milk over generic at the supermarket. You say to yourself “I can afford this now, I just got a raise." And it all goes downhill from there. Soon enough, you find yourself enjoying more lunches out with your co-workers, stopping at Starbucks every morning on your way to work, splurging on a cab when you could easily take the subway. All these little expenses add up until the point you realize that even though you’re earning more money, you’re not left with any more at the end of the month. This phenomenon is known as lifestyle inflation.

If you start spending more as your income increases, you’ll get nowhere. This happens because when a person advances into a more profitable position at work, their expenses rise accordingly. Lifestyle inflation can prevent you from reaching your savings goals, or, worse yet, cause you to accumulate debt. Even if you still manage to pay all your bills, you’re still not building wealth— and that’s not a smart financial strategy in the long run.

To help you out, we’ve gathered a few tips on how to avoid lifestyle inflation and keep your expenses low even as your paycheck increases.

Rework Your Budget

The first thing you should do after finding out that you’ll get a raise isn’t to go buy yourself a brand new smartphone. Instead, sit down and figure out how your monthly budget will change. If you weren’t using a budget before, it’s time to draft one. Figure out how much your living costs are, and then decide where the extra money should go. It’s OK to add a bit of cash to your entertainment fund (for going out, personal shopping, and so on), but be sure to redirect some to your savings as well.

If you have debt, it would be best to use your added income to slowly reduce it over time. If you don’t have an emergency fund yet, establish one. Be smart about where your money goes instead of going on a wild shopping spree and ending up with a considerable balance on your credit card.

Indulge a Bit

It’s normal to want to celebrate your success, so indulging a little won’t do you any harm. As long as you don’t go overboard, buying a new pair of shoes or taking your friends to a celebratory dinner should be fine.

You’ll probably feel like you deserve to buy nicer things now, since you worked hard to be able to afford them. However, this way of thinking can easily lead to overspending. Indulging in a small splurge right after you get the big news will help you get the urge to flaunt your success out of your system. Once it’s gone, it will be easier to stick to healthier spending habits.

Focus on Your Goals

There’s a big difference between being aware of lifestyle inflation and taking positive steps to avoid it. A good strategy to prevent yourself from wasting money is to focus on your long-term financial goals. What is you long-term goal? Is it early retirement? Redirect your added income to your IRA. Do you want to travel? Figure out how much your dream vacation would cost and start setting money aside towards financing it.

It’s important to craft your long-term financial plan based on your priorities alone. Don’t let relatives or friends influence you. And, more importantly, stop competing with them. Just because a friend just bought a new car doesn’t mean that you have to fill out an application for an auto loan too. Just because they decided to buy a condo, doesn’t mean that you should start checking out home loan interest rates before you’re ready. Keep moving forward on the path that will allow you to reach financial success one day, whatever that may mean to you. Don’t get detoured because of a childish need to keep up with the Joneses.

Save More

You can never have too many savings. Besides a solid emergency fund (which should cover your living expenses for at least six months), you should also save for retirement, your children’s education, and any big purchases you would like to make in the near future. Ideally, you should set up automatic transfers from your checking to your savings accounts. That way, the money will go to your savings before you have the chance to spend it on something else.

Also, keep a cash reserve to have in the house, just in case. You can use a physical piggy bank to deposit loose change. Simply empty your pockets in the piggy bank at the end of the day, and your cash reserve will grow steadily. Next time you need some cash and don’t feel like going to an ATM, or you need change for a parking meter or laundry machine, you’ll be grateful you decided to put your loose change to good use.

Don’t be fooled! Even with a substantial pay increase, it’s easy to still end up living paycheck to paycheck, just as you did when you were earning less—unless you’re careful, that is. Consider the tips above and keep your spending under control. You’ll have a better chance of reaching your money goals and better financially secure your future.