Lifestyle Creep

Lifestyle Creep

I grew up poor. No cable television. No home internet. No new (or even late model) cars. No dishwasher. No pets. My mom raised us simply, and quite honestly, we never wanted much.

Over the years, though, I have become accustomed to certain privileges. I now cannot live without my internet. I love my late model Ford. I like cable TV, and the dishwasher is a must in my home. My pets are now a huge joy in my life that I couldn't live without.

I am a victim of lifestyle creep.

How Lifestyle Creep Occurs

If you're not familiar with lifestyle creep (aka lifestyle inflation), it's a phenomenon that occurs as your income rises. Typically, when a person makes more money, they want to spend more money. Simple as that.

The problem with lifestyle creep is that it occurs so slowly that you may not even notice that it's taken over your life. You might begin by buying a basic cable package when you get a raise because it feels like $40 won't break the bank. In fact, you may even feel like you deserve the basic package. But then, a few months or years later, maybe the cable company offers a great deal on their gold package and you bite. As the years go by, new things grab your attention, and your lifestyle inflates even more.

How to Combat Lifestyle Inflation

It's often very easy to fall into the lifestyle inflation trap. We are only human after all; we want the best and the brightest things that can make life easier. We are hardwired to desire rewards. So when we feel that we have the extra money, we often splurge.

For this reason, fighting the creep in lifestyle can be difficult if you're not vigilant. You must be aware of what items are must-haves and which are desires. And you must be prepared to turn down the very item that would make life easier or more fun, instead putting cash from raises into savings. Basically, you must decide ahead of time what can fit into your budget while allowing you to meet your other financial goals.

Doesn't sound like fun, does it? Well, it can be more rewarding if you change your line of thought.

Viewing Saving as a Reward

Most people view physical items as rewarding. We often think that buying a television is more rewarding than putting the money into savings. The television can be hung on the wall for all to see. The cash? Sits in a bank account where no one gets to enjoy it.

If we change our thought process to include savings as a reward, though, we can be happier with plugging away cash than purchasing a desired item. One way to accomplish this is to make goals. Another is to make the goals visual by posting a chart that you update as you add money to the account. Finally, you might wish to reward yourself with a small tangible item for every savings goal you accomplish. Eventually, saving will become a reward, and lifestyle creep can become a thing of the past.

How about you? How do you keep yourself away from the lifestyle creep monster?

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grumpyrumblings's picture

grumpyrumblings wrote:

Wed, 06/20/2012 - 13:23 Comment #: 1

I am *never* giving up my dishwasher. That's why I make money and save money. So that I will always have a dishwasher, a dryer, and a/c. Very motivational.

John | Married (with Debt)'s picture

John | Married (with Debt) wrote:

Wed, 06/20/2012 - 16:17 Comment #: 2

I've been using the snowball method to pay down debt, including adding any raises at work to the payment, which has worked well. I'll be debt free minus house in about a month, so I will have to find new places to send my money before it can be spent. I really need to save for a replacement car, as mine is getting "up there" in miles.

femmefrugality's picture

femmefrugality wrote:

Sat, 06/23/2012 - 02:35 Comment #: 3

I love the feeling that a full savings account gives me. It's so much better than any small, day-to-day item. It buys you security. It buys you possibilities. I think the thing I best like about it is that it can buy you experiences, especially if you have very specific goals.

If you can keep that in mind, it's easier to ward off lifestyle creep. Not easy, but easier. And warding off lifestyle creep is always easier than implementing lifestyle reduction further down the line.