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Learning How to Conquer Lifestyle Creep


 “A situation where people’s lifestyle or standard of living improves as their discretionary income rises either through an increase in income or decrease in costs. As lifestyle creep occurs, and more money is spent on lifestyle, former luxuries are now considered necessities.”  From Investopidia.

Does this sound familiar?

Maybe what you used to consider a treat is now just part of your everyday routine.  Or you are fresh out of college with a new job, and your college apartment or old used car is just no longer befits a person of your newly found status.

Lifestyle creep can show itself in many forms and start, then spiral out of control for different reasons.  But as with any problem, recognizing it is the first step to conquering it.

A Period of Frugality

Some people are frugal out of habit or just by inclination.  But some are forced into frugality due to circumstance.  Maybe a job loss or maybe you decided to just really grit your teeth for a year and live like a monk so you could pay off credit card or student loan debt.

Frugality can be fun or even a hobby for some, but those who go through a period of forced frugality are the most likely to be affected by lifestyle creep once they’re on more sound financial footing.

You’ve been eating nothing but ramen and lentils for months on end.  All your underwear has holes in it.  You’ve dodged all invitations to bars and movies with friends until you’ve reached the point that people have stopped inviting you to things.  And all that sacrifice has finally paid off.  You’ve got a bit of breathing room now and you want to fill your lungs.

Cooking at home is no longer your only option so you start eating out once in awhile.  You’re sick of packing all your little Tupperware containers in the morning before work  so you start ordering lunch out or going out with your colleagues.

Your friends want to hit happy hour and suddenly you’re buying rounds to make up for all the declined invitations.  And so quietly that you didn’t even notice, lifestyle creep has wrapped you in its insidious tentacles.  If you don’t get a handle on it, you could be right back to square one, and a sad life of lentils and social exile.

So what can we do to prevent this creep?

Each kind of creep has it’s own solutions.  If you are coming out of a period of forced frugality, remember how much it sucked.  Kudos, you gutted it out and now it’s over.  But don’t put yourself back there again.  No one likes eating lentils for every meal.

You have some breathing room now but not everything you were doing during this period is such a terrible way to live.  So you can afford better food now but you don’t have to eat only the most pure, unadulterated food foraged by Buddhist monks by the light of the harvest moon.  That shit is expensive.  But you can afford more meat and a wider variety of fruit and veg now.

You can even afford to go out for lunch or dinner once in awhile.  And was cutting down on after work happy hours really that bad?  What did you do with that time instead?  Read, exercise, get your things together for work the next day so you weren’t scrambling around trying to get out the door?  Those things all improved your life more than three times a week bar nights (and tabs.)

All the Things You Never Had

Maybe you’ve always done without a lot of things.  You grew up in a lower middle class family, had to take out loans and work to put yourself through college so you aren’t used to a lot of fancy extras.  And then you get the big paying job after college.  Suddenly you want the latest electronic, to go on really nice vacations, to dive a brand new car.

I know the feeling of going without and the feeling that feels like freedom when you can finally buy what ever you want.  And there are certain things I would never discourage people like us to continue to go without.

An apartment that is in a neighborhood that feels safe, a car that you can rely on, vacations to places you’ve never been and always wanted to go.  Those things are important quality of life matters.  But you can experience them without going broke.

Congratulations, you’re moving out of the hood!  But you don’t need to live in a 5th Ave penthouse to move on up.  Remember, your housing costs should never be more than one third of your salary.

Also, in case you weren’t aware, there are good, reliable cars that aren’t Ferrari’s.  They’re called Honda Civics.

You can also travel the world, literally any place you want to go for way less if you don’t suddenly decide that only first class flights and five star hotels will do for you.  In fact I wrote an article on the very subject

Mo Money Less Time

Sometimes things are moving along nicely and you get the big promotion (and raise) that you’ve been coveting, that you deserve.  All of a sudden, you have no time.  You used to clean your own house, cook your own meals, do your own laundry but now things are piling up.  So you do what we Americans have been bred to do.  Throw money at the problems.  Hire a cleaning lady, order food in, send the laundry out.

Then you look at your bank balance and you think HR made a mistake.  Your net worth is not reflecting your new raise.  So you check Mint.  And now you’re looking at the ugly reality.  Every penny of that raise is now going to support your day to day life.

You have the same twenty four hours in a day that everyone else has.  It is one of few things remaining that doesn’t separate the rich from the rest of us.  How you spend your time is a matter of priorities.

I wake up at 6:00 am every day so I can run in the park before work.  I do it because running matters to me and it sets me up for a better day for everything from making better food choices to being in a better mood and more productive at work.  You know what doesn’t matter to me?  Sitting on my ass watching television or Netflix (Netflix watchers seem to put themselves in a higher category than lowly television watchers.  Maybe what you watch is better quality that whatever societal abomination TLC is serving up but the time suck is the same.)

I know some people genuinely do work longer hours and if you do, you get a pass on outsourcing some non-life enriching activities like laundry but if it comes to a point where you are paying someone else live the life you should be living outside the office, it’s time to reevaluate your situation before it begins to seriously impact your finances.

I Want It NOW!

There is a newly coined term, “the instant economy.”  In the past it was only people in major cities that had instant access to literally anything they wanted, any time they wanted it.  But in this new economy, everything you’ve ever wanted it just a click away.

So you shop on Amazon.  And man, they are good at recommending things you won’t need in the future based on the things you bought that you didn’t need in the past.

Watched Doctor Who on Amazon Instant Video and now you’ve bought Eleven’s sonic.

Don’t feel like cooking?  Order on Seamless. The least amount of human interaction you can experience while still eating food that someone who wasn’t you cooked.

Got a big date and having an ugly day?  As it reads on Glam Squad’s site, “beautiful hair and makeup are just a click away.”  They will send people right to your house to get you presentable.

For the lazy among us, spending money, lots of it, has never been so easy and mindless.

The Stanford Marshmallow Experiment

Ever heard of the Stanford Marshmallow Experiment? It was a psychological experiment in the 1960’s and 1970’s.

Small children were given one marshmallow.  They were told that if they waited to eat it until the tester returned to the room, a wait of about fifteen minutes, they would get two marshmallows.

In follow up studies the children who were able to delay gratification had better life outcomes measured in such things as SAT scores, BMI, and educational attainment.

Do you have less control than a five year old confronted with a delicious marshmallow?

Well if you do, get a hold of yourself!  Delaying gratification is one of the many shitty delights of adulthood.  I like stuff, everyone does.  But when liking stuff means your house looks like an episode for Hoarders and it’s affecting the bottom line, it needs to be reigned in.

Use the thirty day list method.  If there is something that costs over X number of dollars, you write it down and wait thirty days.  If you still want it, then it might be a worthwhile purchase. But odds are, you will forget about it before then.

I get it.  We all want a nicer quality of life.  But you sometimes have to redefine what quality of life means to you.  What sounds better, driving a Ferrari and living in the biggest place you could get mortgage approval for or being able to retire twenty years before your peers to pursue what you are really interested in?  Make the calculation, the math isn’t hard.

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7 responses to “Learning How to Conquer Lifestyle Creep”

  1. Billiam says:

    Nice one Candice. Important topic.

  2. Candice Elliott says:

    Thanks Billiam. I agree, people don’t even realize it’s happening until it’s too late.

  3. Brandi says:

    I experienced the lifestyle creep a few months ago and I didn’t even realize it! I was looking over my budget and was like WTF have I been doing? I reigned it in and hope to get back on track.

    • Candice Elliott says:

      Yep, that’s exactly how it happens. So quietly you don’t even notice. Glad you were able to get on track!

  4. jb1907 says:

    We finally got tired of saving too much money. Wife got a large raise and we finally said WTF on things that won’t impact our situation. We spent $300 on a nice dinner. I went to Chicago for the weekend. Flight was $429 and I spent another $200 on stuff over the weekend. I looked at our combined credit card bill for Oct/November and it is $17,000. $5K of that is a donation, $2.2K is a car repair. The rest is upcoming vacations and eating out. It is a small amount of our income, but we save about 50% of our income and we are trying to lighten up a bit. We plan on retiring when the wife hits about 51 and I hit 55. the cable/cell phone/internet bill is $257, but I will call AT&T and try and get $50 knocked off. We could spend less, but all we would do it put more into savings. I am going to max out my 457 to $22.5K starting in January, so that will take another $438 out of my check.

  5. Alex Barker says:

    My wife and I let ourselves “go” for one month. Usually December.
    By letting ourselves to for one month we are able to look forward to something thru out the year. We found when we starved our desires for nice things, we ran ourselves dry. We lost ambition.
    So for one month we let our guard down. We buy Thai food. We buy nice presents for friends. We live it up.
    All the others months we reign it in with spending and focus on killing debt with our secondly monthly paycheck.

    • Alex, that’s an awesome approach! Laura and I get the same way when we hold out for too long but then it’s out of control and we’re eating pizza every day.

      Better to control it then to let it get out of hand. All work and no play makes Jack a dull boy ;)

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