This is a guest post from Mike Young, who runs The Secure Student, a program that teaches high school students how to manage their money.

In high school, I had a small allowance from my parents every week. When I spent my allowance on gas, food, whatever — that was it. I had to wait until next week before I saw another dime. I remember having to really think about what I spent my money on, and to plan ahead for expenses such as gas and entertainment. It seemed easy: “I’ve got to make this money last until next Monday.”

When I graduated from high school, I had a full baseball scholarship and was receiving money for living expenses. Meanwhile, my allowance from my parents increased. I was also able to find part-time work that kicked in extra money. It seemed as though the next step was natural: I bought a new car.

That’s where things began to get foggy for me. Somewhere between $50 per week and several hundred, I lost track of what was actually coming in and going out. I figured that since my income had quadrupled, there wasn’t any need to watch every penny. Big mistake!

The next thing I knew, I was 22, over $8,000 in credit card debt, and had ruined my credit score. In hindsight, the car I bought was too expensive for me at the time, and those credit cards that were so easy to get, weren’t suppose to be used to buy dinner for my friends. Lifestyle inflation had caught up to me. My lifestyle had surpassed my income.

I took a step back. When I finished school, I found a job that paid me over $50,000 per year. I vowed to pay back every penny of debt — and I did. With the help of an FHA loan and improved credit scores, I bought my first home.

Then things got tricky again. My income went up dramatically — to over $250,000 per year! Apparently, I hadn’t learned my lesson. I bought a newer bigger house, bought a new car, and started my own business. Big mistake!

Before I knew it, I was 30 years old and lifestyle inflation had caught up with me once again. I was in debt, the house and car had eaten away all of my savings, and my income fell to around $100,000 per year. I’m sure you’ll agree that $100,000 is a lot of money, but can you believe it? I was still falling deeper into debt every month.

It was at this time that I began to read every financial book I could get my hands on. Both Financial Peace and Your Money or Your Life had a huge impact on me. I realized that unless I determined my “enough” number and became content with the Stuff I had, I would always battle lifestyle inflation.

Lifestyle inflation affects most of us, especially young adults. That’s one reason I started The Secure Student Program, which teaches high school students how credit and money work, in the hopes that early financial literacy will help them avoid some of the mistakes I made while “growing up” financially.

Today, at 35, I feel like I’ve finally defeated lifestyle inflation. My wife and I track our expenses regardless of income, and we budget and save on a regular basis. We also have a financial plan for each year and each quarter to measure how well we’re doing. We focus on financial progress and not perfection, which helps us to not feel stressed if things don’t go as planned. We’ve finally found a system that works for our family, and that’s the most important part of financial planning.

Photo by Sister72.