What You Need to Know About Avoiding Lifestyle Creep

financial literacy money Dec 01, 2021

On the surface, you look successful. You’ve been climbing up the career ladder with one higher-paying position after the next. You earn raises and bonuses. Yet, your savings are low and your life goals still lie far out of reach.

You may be experiencing lifestyle creep. That’s when your expenses keep increasing along with your income.

That could mean financing a flashy new car or moving into a bigger house each time you get more money. It could also involve less conspicuous purchases, like dining out and buying expensive phones.

The consequences can be serious for your finances and overall well-being. For example, you may not have enough money to retire or you may be stuck in a job you dislike.

Learn how to say goodbye to lifestyle creep. Try these suggestions for bringing your spending under control and changing your relationship with money. 

Tips for Managing Your Finances

You can reward yourself for your hard work without draining your bank account. Make strategic choices about saving, investing, and spending.

Follow these strategies: 

  1. Create a budget. Take control of your future with a detailed spending plan. Allocate enough money for your top priorities, save regularly, and leave room for surprises.

  2. Adjust your spending. Figure out where your funds are going. Maybe you need to pay off your debts. Maybe you need to refinance your mortgage or move to a smaller place.

  3. Monitor your subscriptions. Consumers spend an average of $273 a month on subscriptions, and most of them are unsure of the exact amount. Cancel services you seldom use and consider rotating between the rest.

  4. Automate savings. Make it easier to build emergency and retirement funds. Enroll in your employer’s 401(k) or 403(b) plans. Deposit your tax refunds into interest-bearing accounts.

  5. Set goals. Having specific objectives can help you stay on track when you’re tempted to splurge. Write your goals down, so you can keep them in sight.

  6. Seek professional help. Working with a financial advisor is another option. Your employer, bank, and community groups can help you find services in your price range.

Tips for Becoming Less Materialistic

It’s natural to use money to make your life more pleasant and comfortable. However, becoming too attached to possessions can distract you from more reliable sources of happiness and fulfillment.

Keep these ideas in mind:

  1. Explore your purpose. Overspending can be a sign that you're trying to deal with difficult emotions and find meaning in your life. Try spending more time connecting with family and friends or your own spirituality.

  2. Enjoy inexpensive entertainment. Living on a budget leaves plenty of room for fun. Go to free outdoor movies and concerts. Spend weekends and vacations camping and hiking.

  3. Avoid advertising. How many messages do you receive each day urging you to acquire more stuff? Install ad blockers on your devices and take a break from social media.

  4. Clear away clutter. You may not even realize how many sweaters, appliances, and books you already own. Go through your garage and closets for items you can donate to charity or sell online.

  5. Pause before buying. Give yourself a cooling-off period, especially before major purchases. Ask yourself if you really need more furniture or stereo equipment.

  6. Give generously. Discover the joy of sharing your blessings with others. You’ll probably find that making others smile brings you more happiness than any shopping spree.

Protect your financial security and peace of mind by preventing lifestyle creep. Monitor your spending and make intentional decisions about money that will help you create the life you really want.