Hello everyone! Today, I thought I’d share my experience lately fighting what is known as “lifestyle creep”.
Now, I did not come up with the term lifestyle creep! It is a term I came across when I started learning more about personal finance. Lifestyle creep is used to describe the trend where the costs of keeping up with one’s lifestyle start to increase as their income does.
In my career thus far, this was mostly true for me too. I started out working for minimum wage in college, just for some extra spending money and as part of my work-study program. While college was expensive, my costs were pretty low to be honest. Mostly snacks and occasionally going shopping with friends. At that time, $100 felt like a ton of money, both when earning it and spending it.
After I started my first corporate job, my income almost doubled, and so did my spending. As I got promotions and small raises, the same thing occurred. Luckily, some of that increase in “spending” was actually me doubling my student loan payments and putting 15% away into my 401k, so I was still making good decisions with some of my spending! But the rest? Well that was going to things like Broadway in Chicago subscriptions and buying designer handbags. Luckily, I never lived beyond my means, so I never had credit card debt or crazy loans (except for those student loans). But still, it’s crazy to get my W2’s at tax season and wonder where all that money went!
While I’m glad that my 20’s were fun and I love the experiences I had, I do look back and think I could have cut back on the spending, started a Roth IRA instead with that money, and started saving for a house down payment much earlier. I still had a good amount saved in an emergency fund, but it could have been larger for sure.
Eventually, the pandemic started, causing me to lose my job in the first round of furloughs, and having to rely on unemployment for a little over a year before I found a new job. That new job paid a bit more than my previous job, thank goodness! And then less than three months after starting the job, I got another new job that paid a lot more than that one!
Since losing my pre-pandemic job, I cut way back on my spending. I saved nearly all of my unemployment and used a chunk of it to finally start that Roth IRA and dumped the rest into a High Yield Savings Account to bulk up my emergency fund and save for a house. As I move forward, I am trying to do the same thing. Here’s what I’m doing to fight lifestyle creep!
Fighting Lifestyle Creep
The first think I do when I come across something I think I want, I stop myself from reaching for my card. It’s so true that when you force yourself to wait a few days, suddenly that thing you had to have is no longer that important. I did this recently with a hoodie I saw on TikTok. I still really love the hoodie and it’s design, and I love that the business that sells it is Latina owned, but the truth of the matter is that I just don’t need another hoodie. I have way too many as it is! I do have it bookmarked in case there is a time later when I want to treat myself or if I do end up with a need for a hoodie, but I did go from “I HAVE TO HAVE THIS NOW!” to “Well it’s really cute… I just don’t need it!” and it’s worked wonders.
Another thing I do now is shop with intention and try to stick to the basics. When I do buy new clothing, I try to stick to neutrals. When I shop for my dog, I try to stick to just what he needs and only replace stuff when it’s needed. He plays with toys more aggressively than my puppy niece did, and more often, so he does have a good number of them, but at first I only bought a few and a small variety while I learned what kind he likes. I also don’t buy things “just in case” or “for later” anymore. If I see a new set of towels on sale, but I didn’t go to the store with towels in mind because I don’t need them, I just don’t buy them. Things like swim suits also wait until I need them. I can’t tell you how many swim suits I cleared out of my closet in a recent declutter that still had tags on because I bought them, didn’t use them, and then my size changed! I’d bought them “just in case” I went on a vacation and needed one, but I never used them! It was such a waste. I will admit that sometimes I do mess up, but I try my best and every day is another chance to do better after all!
The last thing that I do, is I visualize my net worth. I have a very specific goal in mind, and every time I’m considering buying something, I realize I’m taking away from that number. I have to weigh if that item is important enough for that number to take a small hit. My dog’s kibble? Of course it is important enough! But that hoodie? Absolutely not. A new car even though my 2010 car runs beautifully? No way! Sure, those leggings might only be $25, but combined with that $20 sports bra and the fact that if I spend $65 I get free shipping so might as well add in that $45 hoodie? Um that almost $100 purchase is definitely not!
I’m proud of my progress so far with these “easy” guidelines. Even so, it isn’t always easy. Like I said, sometimes I still mess up! But I stop and reflect to think about where I went wrong in this purchase and work to forgive myself for the mistake. And I do still want to have a good time in my 30s, especially once we are truly out of this pandemic. But I do want to make sure I’m prioritizing my financial well being over a shopping spree.
Do you have any more tips for me on how to fight lifestyle creep? I’d love to hear them!
Thanks for reading!
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