Kristin Wong

Lifestyle inflation gets a bad rap, and understandably so. It's so darn tempting and so many of us seem to have a serious problem controlling it. But inherently, lifestyle inflation isn't a bad thing. Lots of Get Rich Slowly readers have made this point, and I agree: if your finances are in order, what's wrong with treating yourself to a little luxurious lifestyle upgrade?

In fact, I'd like to argue that lifestyle inflation can be done responsibly.

I live below my means, but I'm not eating beans every night, either. As I've gotten older and my finances have evolved, I've admittedly engaged in a little more lifestyle inflation. But I've always been careful and mindful of it. Here's how I feel I've handled my lifestyle inflation responsibly.

Julie Phillips was planning to move into a new apartment when a massive flood in Alberta damaged her would-be building. Suddenly, she found herself displaced.

"The reason I wanted to move is I wanted to save on rent," Julie says. "I wanted to save more, I wanted to live with another person. I wanted that camaraderie."

After searching extensively, Julie grew discouraged.

As a teenager, I had a part-time job that was already mundane and dreadful enough, but then Kelly P. was hired. For whatever reason, Kelly and I were instantly repelled by each other. She thought I was too dorky to bear; I found her voice impossibly grating. She over-pronounced her esses.

All it took was one shift. One evening, Kelly and I were stuck together. Alone. For five hours. An entire shift of her whistling the letter "S." But by the end of that shift, we could somehow tolerate each other. Eventually, we liked each other. After a while, we even started going to lunch together.

My relationship with money is blossoming in the same way.

Over the summer, I read a book that likened a miserable job to hanging onto the edge of a cliff. I thought it was an appropriate analogy. Like most people, I've been there, and that's totally what it feels like. You know you have to let go, but letting go is scary. You could land in a better spot, or you could meet your ruin.

The author argued that sometimes letting go of that cliff is gradual, but once you do, you usually experience success. She had examples, but I imagine there are plenty of "letting go" stories that didn't turn out so well.

Still, I'm a fan of letting go of things that don't serve you well. I also understand that some don't feel this is an option -- for financial reasons or otherwise. I've been thinking about this a lot lately: How do you know when you're on the edge of a cliff? What can you do about a job you hate, and how do your finances fit into the equation?

I recently came across an interesting statistic. According to a poll from Harris Interactive, 41 percent of people rarely or never redeem their credit card rewards. It almost hurts to know all of those rewards are going to waste. A more recent study found that 73 percent of Americans are enrolled in rewards programs but have no idea how many points they have.

That used to be me. I discovered the magic of rewards points sometime right after college, when I finally started to take an interest in my financial situation. I wondered what the large number looming above my account number was, and, next thing I knew, years of unknowingly accumulating rewards points turned into a $100 statement credit.

Since then, I've been taking full advantage. I use my credit card like a debit card, budgeting and paying off everything I spend. My card doesn't carry a fee, and I don't rack up consumer debt -- I just earn points. And as modest an amount as it may be, I always get a little excited when I periodically redeem my rewards.

I first read about the envelope system back in college. I used it regularly, but after graduating and paying off my debt, I sort of abandoned it. I'd gotten a hold of my finances, and I figured I could budget safely without having to use this tactic. I could afford to give myself a break.

Then, last month, I realized just how much of a break I've given myself over the years, especially when it comes to food. Upon examining my expenses for the year, I complained to Brian:

"Hey, why am I always paying when we go out? I know it's the 21^st century, but come on!"

A while back, my blogger friend and fellow GRS writer Holly Johnson wrote about a healthy dose of lifestyle inflation. In that article, someone made a side point that there shouldn't be morality in personal finance -- it should be about practicality.

Within the comments, there was a brief but interesting dialogue going on about this topic -- morality and personal finance. I thought it was really interesting and worth expanding on more, as it prompted me to give this topic a lot of thought.

I agree that it helps to think of personal finance and frugality in practical, functional terms. What's the investment of this purchase? How much is my time worth? What is the cost/benefit of something?

For someone who hates accumulating stuff, I sure have a lot of it. There's the skirt suit that I haven't worn in four years, for example. Or the ALF lunchbox that I just can't part with. Oh, and my indispensable collection of PEZ dispensers.

I could go on, but this is a money blog, not a humble brag about all the cool toys I have.

At any rate, lots of this stuff has got to go, and the good news is: it's yard sale season! The bad news is: I don't have a yard.

I mentioned in my last post that I read Barbara Stanny's "Secrets of Six-Figure Women." Stanny interviewed 150 women who earn more than $100,000 annually and sought to find what traits, experiences and motivators they shared in common.

Unlike most books, this one didn't take me three months to finish. It's a fast read, and I think that has a lot to do with how relatable it is. I'm not saying I fit the bill for every six-figure trait Stanny has outlined; but you can't help but compare yourself to the high-earning women she's interviewed.

Although the book is meant to empower women, I think much of Stanny's research is every bit as helpful to men. Here are the strategies and milestones of high earners Stanny outlines in the book. Some of them hit home; others I questioned. Tell me what you think.

Continue reading...

I just read Barbara Stanny's "Secrets of Six-Figure Women." I was happy to find that I share similar traits to the 150 women she interviewed. But there was a section that stood out to me, mostly because I didn't expect it to stand out to me.

We previously reviewed Stanny's book "Overcoming Underearing." Guest reviewer Jeremy M. wrote:

"[Stanny] learned that the big difference between highly successful women and less successful women was how they valued themselves and what they were willing to do to get what they wanted."