Avoiding Lifestyle Creep

It almost seems like a rite of passage; you get a job and suddenly you need to “prove” to everyone that you’ve made it. You need a new car, new clothes, the best apartment. This is known as lifestyle creep. As you make more money, you feel the need to spend this money on more expensive things. If you have fallen for it, and many of you have, there are important reasons why you should avoid or delay lifestyle creep as long as possible. (And don’t feel bad if you have fallen for it, as I have too!)

Planning Your Future

There is nothing worse than having to delay your future. Be it delaying the wedding because you have to save up more money for it, or delay retirement because you just can’t afford it. The greatest asset you have is time. By investing as much money as you can at a young age, you get to take advantage of time. You let that money grow and compound upon itself.

Buying Nice things
Do you need to buy nice things?

Being Unhappy

Maybe you are in the middle of your career and you hate every minute of it. But because you bought the McMansion and the new BMW, you have to go to work in order to pay the bills. Think of how great it would be to have the freedom to quit your job if you hated and spend your days doing what you really enjoy. How great would that be?

I recently had lunch with a friend who did just this. He hated (and I mean hated) his job. It was a lousy job – I know because I worked with him for three years before I couldn’t take it anymore). He is in his mid-40’s. He just paid off his mortgage and has no major bills. His wife works and he will be covered under her health insurance. I’ve never see him smile so much.

Spending Time With Your Kids

The main reason I try to avoid lifestyle creep is because I want to be around to see my family grow. I want to go to the soccer game or the music recital. I don’t want to miss those times because I have to work overtime to pay the bills. Avoiding lifestyle creep keeps the door open for me to attend these events.

Final Thoughts

Always remember that you don’t have to show or prove to others that you’ve made it. In fact, the typical millionaire drives a late model car and lives in an average house. You probably wouldn’t know he had money if he passed you on the street. Learn to be happy with what you have.

But, don’t take this as me saying that you cannot buy any new toys for yourself or live unhappily while you plan for the future. What I am saying is to be reasonable with it. You can be happy now and later. If you really want something now and can afford it, by all means, buy it. Don’t be so miserable now that you resent saving or planning for the future. Just make sure your current spending is in moderation so that you have to opportunity to take advantage of any situations that come your way in the future.

14 Responses to Avoiding Lifestyle Creep

    • I’m guilty of it too Glen. It’s good to put everything into perspective. I think if you’ve done a good job at saving over the years, you can “reward” yourself with nice things. It just gets a bad point when instead of rewarding yourself once in a while, you are always rewarding yourself or you are simply trying to look the part.

  1. Good post. I think it’s natural to want more things as you make more money, but much of it is not needed. Delaying gratificaion and only allowing yourself to indulge a little bit can be a great way to help stave off going over the edge. If you increase your spending with the increased income, you’ll never make out ahead and will have issues as a result.

  2. I need to loosen up (just a little) as I often just funnel all of my money into savings or investments. I sometimes feel the urge to keep up with everyone else but I don’t give in if that is the only reason. Only if I can truly justify the expense.

  3. Okay, so I recently gave into lifestyle creep in a huge way with our new house. But I have learned two things this month since we moved in. One, we spend so much time at home that the new place is totally worth it and we hope to spend the next 30-50 years of our lives here. Two, as long as we don’t start wasting our money on the stuff that isn’t super important, we can afford this lifestyle creep…just can’t afford to start wanting new cars and new stuff all at the same time too. So I guess we are going the “planned lifestyle inflation” route…

    • I like your justification. When my girlfriend bought a new car, she wanted leather interior and a sunroof. She debated whether it was worth the added cost. Since she drives a ton for work, she wanted to be happy in the car, and leather and a sunroof made her happy. She planned on keeping the car for awhile too, and she has. She made one big purchase 7 years ago. You can spend, just make sure you can still save!

  4. I think more than anything this 1 concept is absolotuley the reason many people are in debt longer than they should be.

    Many of my coworkers who started at the same time are driving $40k cars while still having student loan debt! That is crazy! 3 years out of school and they need a $40k car?

    Great post and you are 100% right – fight lifestyle creep at all times!

    The way I have attempted to do this is to make it tough to cover monthly bills since a more than comfortable amount goes to savings and debt repayment.

  5. Avoiding lifestyle creep is a constant struggle. I think all of us have our own creepers. For us (like Crystal) it is real estate. We are constantly fighting a battle with ourselves not to go out and spend more money on a new house. So far, our wits are winning out over our emotions.

    • It is tough Greg! Advertisements are everywhere and if you can block them out, your family and friends are promoting things unknowingly to you…”did you hear so and so bought a house down the street? The master bath has a jacuzzi!”

  6. Some interesting things to think about here.

    It’;s only been very recently that my partner and I started having a little discretionary income – we’re well away from buying a house, neither of us has so much as a drivers license and we both hate shopping for new cloths. You know what we went ahead and bought, to the raised eyebrows of family and friends? A twice monthly cleaning service.

    Now instead of spending our limited time together tidying, we get to actually hang out, and we both have more time for work/school.

    I agree with Crystal’s point above – something is, I think, really only lifestyle creep if it’s a “just because” – Her house is an investment and creates value just by being – same with the car. This is a really good filter to look at buying decisions through – thanks!