Lifestyle Creep
I was listening to an episode of The Finance Girlies recently, where they were discussing lifestyle creep, and it started my wheels turning. What do I define as lifestyle creep? When is it a problem? Is it sometimes fine?
And of course, I want to know what you think too.
What is lifestyle creep?
I think typically it's considered to be a scenario where your spending increases at the same rate as your income, so no matter how much money you make, you never get ahead.
By that definition, lifestyle creep could definitely be a problem. No one can reach their financial goals if they keep living paycheck to paycheck no matter how high their income goes. Under these circumstances, even a million dollars a year would not feel like "enough".
The opposite of lifestyle creep: also possibly problematic
If lifestyle creep means your spending matches your earning, the opposite case would be if your spending never increased at all when your earning increases.
Obviously, living like this would put you in good financial shape, but I'm wondering if it's problematic in other ways. I mean, I'm a big fan of saving, but money does not exist merely to be saved.
Money can also serve other purposes, such as making life easier/more enjoyable, allowing us to be generous to others, and supporting worthy causes, to name a few.
If we don't ever expand our view of money beyond "save as much as humanly possible", then I don't think we'd be using our money as well as we could.
(To clarify: I have in mind a case where a person has some financial wiggle room and is still choosing to pinch every penny possible. This is not the same as a case where a person has to pinch every penny just to survive.)
So...maybe a middle ground is right (of course!)
It always comes back to this, right? Somehow, for almost everything in life, the answer is "balance", which is usually harder than either of the extremes.
I wonder if one of the keys is to allow for some little treats and joys, but to still always frame them as treats and joys. Maybe the problem comes when we start to view these things as a new bare minimum, which makes us take them for granted.
Maybe it also is helpful to remember financially tighter times; that could help us not to take some lifestyle creep things for granted. For instance, when I am able to help someone else financially, I remember times in my life when I didn't have the wiggle room to do that, and it helps me appreciate the wiggle room I do have now.
I'm also thinking intentionality is key. Lifestyle creep sorta insinuates that expenses have sneakily kept up with income, so maybe the lack of intentionality is the problem. If I am carefully and actively choosing to increase my spending on something that is important to me, it's unlikely I will get into a situation where I accidentally spend my entire raise.
A few examples from me
As a frugal person, my tendency is always going to be on the side of saving, saving, saving, even when it's not entirely necessary. But I have spent more than necessary in a few areas over the last year.
My lawn guy
You all know that this summer, I finally cracked and hired someone to mow my yard. It's $60 for a mow, weed whack, and leaf blow, and I only need it about every 2-3 weeks in the summer (my yard is quite shady!).
This has been entirely worth it, and at least so far, I do not at all take it for granted. I am pleased as punch to come home from work and find a tidy yard, and I'm pretty sure I will keep paying for this as long as I live here.
My dream car
I am definitely living a fancier car life now that I drive my Civic instead of my minivan. 😉 I love it, and I will say, it would be a little hard to go back, so maybe I am experiencing some lifestyle creep.
However, I do not take it for granted; even though it's been almost a year since I bought it, I still regularly feel thrilled and surprised that this car is mine. So, I feel pretty good about this "creep".
A cafe streak
In the last week, I have visited three different cafes, laptop in hand, in an effort to get my homework done. If I wanted to leave the house and do this for free, I could go to my college library or my public library. But trying out cute little cafes/bakeries helps this feel a little more like a treat, so I decided to go the not-free route.
Homework is not going to be here forever, so I don't think this will be a permanent lifestyle creep; it's more of a temporary survival measure.
The iffiest: my car wash membership
I'll use this as my last example. I bought a monthly car wash membership in the springtime because the yellow pollen dust was making my dream car look a little raggedy.
But then I decided I liked the luxury of unlimited car washes (I'm so fancy now!), and I have kept the membership since.
This does feel like a bit of lifestyle creep because I have added in a new and largely unnecessary expense, and I am sorta getting accustomed to this new level of fanciness.
Is this bad? I dunno. I can afford it, and it is still making me happy!
Honestly, when I look at all of these things, I know I could give them up if necessary, and it wouldn't feel like an unbearable ask. Maybe that's important too?
I used the word "maybe" a lot in this post because I am really just thinking out loud at my keyboard. 😉 Sooo, I want to hear from you, because you might help solidify my thinking.
I've been thinking about this lately, because I was promoted a few years ago and I'm definitely spending differently than I did before.
I find myself only wanting to buy quality now, whether its new or thrifted or gifted. For example, pants are no longer thrifted. When I did thrift pants, they never fit well and the stretchiness that is built into everything was pretty worn out so I'd have to wash them more often to get their shape back.
My car was 15 years old and still running, so I started to pay my savings account a car payment every month. I saved enough cash to buy a newer car that I plan to drive for the next 10 - 15 years. I guess my raise didn't keep me from being thrifty, but it did give me some peace of mind, and allows me to make quality choices. I still never shop just to shop. I'm also looking ahead to retirement, which will reduce my income, so I'm glad I know how to live frugally and less wastefully.
I agree that balance is the most important thing here. I don't think there's anything necessarily wrong with increasing spending, as long as you are aware of what you are putting money into and aren't spending for the sake of spending.
I have definitely fallen into the trap of ordering takeout more frequently, but on the flip side, I HAVE got a lot better at cooking in the past couple of years, and I think that's due to being able to afford more ingredients in general and time for trial and error. It matters less if a recipe goes pear-shaped (no pun intended).
I still buy from charity shops and will usually sleep on a purchase rather than impulse buy (for example, coincidentally enough, I bought a pair of pyjamas yesterday but only after considering it for a while). However, I try to buy things which are well-made, if I'm buying new, as those are probably made in better working conditions and are also less likely to break instantly. In the past, I couldn't afford to always do so. Similarly, I like to support independent companies, and prefer to go to an independent cafe or restaurant if I can.
My main spending is usually on travel - I love visiting new places and I can usually find cheap travel and places to stay (although I never stay in hostels, which I used to do in my twenties). I suppose this is kind of lifestyle creep, as I didn't have the money for that in the past, but I try to be mindful about it and to save money in other areas of my life.
I think the main point is to think about which areas of your life are improved or made easier by money and to focus on those - it doesn't need to be all or nothing - and to be creative in others. What is right for one person might not be right for you, and vice versa.