it becomes much more difficult when married.
this post was submitted on 22 Dec 2024
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Bro for real
The article says:
Signs of lifestyle creep could include difficulty saving money and increasing debt.[2] Making a budget and setting a limit on expenses could potentially limit lifestyle creep.
That sounds about right. To avoid lifestyle creep...
- save money
- don't take on debt
- make a budget
- set a limit on expenses
Our financial advisor gave us these tips:
- Don’t create excessive overhead for managing money. Ideally, you know your monthly expenses, put all the money to cover them in a bill account. That money doesn’t exist and comes out with automatic payments. What remains is “carefree” money that you should enjoy.
- Work towards a new $0. This is for building a safety buffer. You pretend $250 is $0. When you get to $250 in the bank, you start to watch your finances much closer to figure out how to not spend. Then next month, you make the new $0 as $275. By doing this, you get in a better habit of saving.
- Take company matches on 401K & other benefits if you can use them. This should be more money you pretend doesn’t exist because the long term gains are very good compared to the short term outcomes of more money now.
- Have forcing functions built into your calendar for reviewing finances. Once a week, once a month. You shouldn’t stress about money constantly, but you shouldn’t be unaware either.
- As others have said, there’s a big mental & emotional component to doing this work & having the self discipline needed.
- Always pay off the Credit Card balance. Always.
- …No seriously, do not carry CC debt…
I’ve had life style issues 3 times in my life, which I’m really fortunate for honestly. You only get lifestyle creep from growing means & a failure to adjust your situation. It’s significantly harder for many people in our modern world to do some of these steps because people are already paycheck to paycheck. If you get a raise, it’s a blessing (I’m a UU), but you got to use it for good, whether that’s your security or the security of others.
These are very useful, thank you
Budget as if you don't make much money.
I read a book called The Richest Man in Babylon and it states "that which we consider to be our necessary expenditures will always rise to meet our income, unless we protest to the contrary". I've tried to remember that lesson my whole life. You must be very intentional about expenditures, scrutinizing each one, and scrutinize it in the context of the lifestyle you wish to maintain, not the one you're newly capable of sustaining.
And then what? You die with a lot of savings? What are you saving for?
No, you get off the wage:spend treadmill and enjoy your life before you’re old and living with constant medical issues and tethered to care facilities.
Save so you don't end up working your whole life. Was that not obvious?
Achieving financial security and independence is more valuable than any stupid item/service/vacation you might purchase.
I grew up with modest means, took out the smallest student loans that would suffice and worked my way through college. I'm now middle aged and do allow myself a few nice things but have always kept my spending very intentional. I've achieved a position where, barring some major war or disaster, I could realistically just stop working and I'd have enough resources to make it to the end of my days, although I'd have to stay modest.
I still work, though. How i spend the next 5 years will determine what degree of comfort I will be able to afford in retirement. I'll probably just take an easier, part time position to keep myself busy and comfortable.
My point is, if you allow lifestyle creep to consume all your resources as you become a productive adult, you may have nice things (and you may impress others with your flashy crap) but you'll just be living to work. Early retirement with my old truck seems way better than driving a brand new car to work.
Splurging won’t make you happy in the longterm. Saving and buying your own home might. That’s why you want to save money, to have options available.
That would be great if the prices of houses didn’t rise faster than it is possible to save for the majority of people.
That's true if you were just keeping savings in a non-interest bearing account. Stock market returns, however, have outpaced house prices.
ah but slightly nicer groceries would
But they make them more and more expensive every year. What’s the point of chasing a carrot if it’s attached to your head?
I feel the correct balance of this practice will reach a point when you start answering "fuck it, but that thang!"
If I'm scrutinizing every choice then as my money grows my concerns wouldn't be the same. I might have not splurged on that X-Men mansion attack by sentinel diorama 10 years ago, but now if I scrutinize my parameters would be different. Now that diorama would look banging on my dining room table.
You get entered on to the high score list at the end
I think also the need to project a certain image as mentioned in the article is a big issue for people these days.
It's an easy trap to fall into, so many people on social media, cosplaying being rich, ability to view life styles of people who are actually rich. There is something nice about having people envy the perceived position you're at in life.
That said, you shouldn't really care how you're perceived. Only assholes feel the need to show others how well they are really doing and thats mostly just to make other people around them feel small, so that they get to feel big.
From the article : "people compare their own lifestyle with others".
Don't.
Automatically transfer all excess funds into a separate account with penalties for withdrawal.
Money sitting on a savings account loses value. Buy stocks, indexes or ETFs with the money instead. The penalty for getting the money back is capital gains tax.
This was always my approach - as soon as you get a pay rise, increase the amount going to savings.
Never had it, don't miss it.
As for how long to leave it in savings, totally different question and depends on what you want from life.
This is the correct way to do it.
U avoid it by not being a sucker for the rampant consumerism being shoved down your throat. U dont need the new expensive thing just cos its shiny the old one is 99% identical. Dont fall for peer pressure etc.
Relatively simply, if you don't want it, then it won't happen. It's really not complicated. For example, instead of getting a 5% raise, reduce your hours from 40 -> 38. Instead of spending your excess money, put it into retirement savings. Just don't use extra money, or don't get it in the first place.
Of course, before that, to "not want" lifestyle creep you first have to deprogram your brain from thinking it needs new things to be happy. That one might be a little harder.
Wait 30 days for „luxury“ buys and see if you still want it. That cuts down on splurging significantly.
This is a great strategy that I use frequently, sometimes waiting much longer. It's easy to justify expensive purchases when you're emotional about it. It's difficult to maintain that same level of emotion for 30-90 days. If you don't still feel strongly about it 3 months later, then it's not worth it.
Do you spend money to improve your life, or just to get through the week? Earning more money is hard, but money makes money - the less you spend, the less you'll need in the future, and the more you'll have to invest. It's a snowball. Once you internalise this, tracking your finances, reducing your spending, increasing your wealth, and reducing your workload becomes a fun game.
Once my wife and I realised this is what we wanted to do, it took us 7 years to quit work completely. Frugality is the most important part - not earning, not investing - lifestyle creep is a big part of why.
See:
- your money or your life
- early retirement extreme
- Mr money moustache
Imagine you have to move to a new town and you only have 1 POD for your stuff. What do you take? Also important, what are the first things you buy when you get to your new place?
Another experiment, suppose you have enough money to house and feed yourself. What are the things you find yourself wanting/needing to buy?
Some of what's on your list and everything not on it is a luxury.
Why would you buy new stuff when you move somewhere else?
Imagine you can't take it all with you. Like you have to do some serious Mari Kando.
Avoid it within reason I guess...