Detecting and preventing lifestyle creep

This is a guest post from freelance writer Jessica Ward.

For three years, I've been patting myself on the back. The household expenses remain the same every month, and we're getting out of debt. In spite of increases in costs, we've found efficiencies and made room. But, as they say, after pride comes the fall. I discovered this month that we're actually making less progress every month now than when we first started making monthly budgets!

Initially I thought this was a short-term trend, but when I looked back a little farther in the old budgets file, I discovered that we've really been on this path since day one. We have succumbed to “lifestyle creep.” Subtle upticks in our family's expenses that don't necessarily fall into line with real costs of living.

Slowly and stealthily, our lifestyle has edged back up. An extra meal out here, a technology upgrade there, all unnoticed because we haven't spent beyond our planned expense cap, but unchecked because we didn't notice that we had slowed progress towards our goals.

Identifying Your Budget “Creepers”

We use a zero-based budget. Money in equals money out, every month. Sure it might go “out” into a savings account or towards debt, but the checking account ideally zeros out every month. I neglected the second step of allocating everything. By way of example, here are some expenses that crept up on us this year, virtually unnoticed:

  1. Family gym membership, $1,200 year. (We did elect to keep it for 2012, but are making other cuts to accommodate.)
  2. Data plan on my husband's phone (he doesn't even know how to text). We cut this in July, but not after spending $240 for the year on unnecessary data charges.
  3. A digital camera upgrade (rationalized with the old “it's a business write-off” excuse) at $400.
  4. An average of $200 per month additional eating out expenses, or $2,400.
  5. An average of an additional $200 per month in charitable expenses, or $2,400 a year.

All told, we experienced an increase in lifestyle (and decrease in goal progress) of nearly $7,000. Had we minded our budget better, we'd be out of debt by now. That's embarrassing.

Other people will have other areas of budget creep. Fancy coffee, storage unit, unnecessary gadget upgrades. Little upgrades like premium cable can be adding hundreds to your household expenses every year.

How to Creep-Proof Your Budget

If you're feeling the budget creep, take the following steps to get back on track.

  • Set your budget, including all expenses, by prioritizing your household bills and financial goals, treating them just like a bill.
  • Revisit your budget and revise based on actual changes in costs. While our spending remained fixed, some expenses (fuel, food, and homeowner's association dues) went up, and we sacrificed about $200 per month towards financial goals by not revising our spending (and income) expectations upwards or another area of the budget downwards (without sacrificing your progress to goals). When costs go up, it's time to ramp up the “side hustle” income.
  • Maintain your diligence about buying bargains. Have you relaxed your efforts at coupons, sales, used/consignment, bargaining or trading? Have you even stopped price-comparing? Just because it's in the budget, doesn't mean you shouldn't try to get a better deal.
  • Have old habits crept back? Extravagant gifts, daily lattes, extra vacations, and weekend getaways, or just too much eating out? Many of us have old financial habits that break our budgets. Keep a wary eye out for them.

Please, tell me I'm not alone in this budget faux pas? Has your budget suffered from creep?

More about...Budgeting

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Trina
Trina
8 years ago

Thanks for being so honest. 😉 We don’t have debt, but we are trying to pay off our house in two years, and I am VERY embarrassed to admit that a month ago I realized we were spending $1200 a MONTH on food (more than half on eating out). There are just two of us and our 6-year-old who subsists on PB&J. We are now on Day 28 of our “No Eating Out For 30 Days” experiment (based on a post here about a month ago!) and it’s going very well. We only ate out once, and that was because… Read more »

Samantha
Samantha
8 years ago
Reply to  Trina

This is what happened to us. We noticed our “eating out” was really creeping up there, into levels we were not comfortable with. Its all about priorities, and we don’t value restaurants as much as paying off the mortgage. After taking the “30 Day no restaurant challenge” we kicked the habit! We go out occasionally now, and are much more mindful (and appreciative) when we do.

Dee
Dee
8 years ago
Reply to  Trina

Why not apply that money to the mortgage?

Trina
Trina
8 years ago
Reply to  Dee

We’re already paying 4 times our normal mortgage payment to pay down the mortgage. Using the extra money to finish paying the mortgage off one month earlier just isn’t enough of an incentive. We need something more concrete, something we really want, and would consider more of a luxury. Replacing shabby furniture is definitely a luxury for us — my brother in law once said that the lamps in our living room looked like they were from a yard sale. 😉

Celliott
Celliott
8 years ago
Reply to  Trina

Wow. Four times your current mortgage. Excellent work!

We just paid off our 30 frm in 1 year and 10 months. We bought well below our means and got super focused. Feels great. Keep up the good work!

Nicole
Nicole
8 years ago

Is budget creep always a problem? Has your income stayed flat or gone down over time? If not, then maybe it’s ok.

Donna Freedman had a really good post on this topic recently: http://www.donnafreedman.com/2011/12/15/strategic-pizza/

Well Heeled Blog
Well Heeled Blog
8 years ago
Reply to  Nicole

Just don’t have lifestyle stagflation – where your tastes go up but your income comes down!

Nicole
Nicole
8 years ago

Hahaha! Definitely!

Janette
Janette
8 years ago

Great article- but- I do not consider 200 in charitable contributions to be in the same category as eating out or text unless you give to others to impress someone. If you give with your heart and have the funds, it is a good part of making more money.

Lukas
Lukas
8 years ago
Reply to  Janette

Exactly! There is a huge difference between spending money on yourself and giving away your money.

a
a
8 years ago
Reply to  Janette

I just wanted to point out that the author said it was an ADDITIONAL $200 a month. So it sounds as though they have increased their charitable giving. While giving to charity is commendable, its still an unnecessary expense if you are not meeting your goals. I know that charitable giving is a hot topic and a very personal decision, and for many people its linked to spiritual beliefs. But I can understand why the author included it. It sounds as though they donate a predetermined amount and have been giving in excess of that. In that case I can… Read more »

Beth
Beth
8 years ago
Reply to  Janette

Agreed! I don’t see why donations are considered “lifestyle creep”.

Katie
Katie
8 years ago
Reply to  Janette

A previous poster mentioned that charitable giving is a hot topic here and I agree. While it may seem different to many here, for budgeting purposes, it is in the same category: “additional expenses”. Charitable giving is a wonderful thing, but I don’t think commenters always realize that judging others’ giving (or constantly referencing it) can come off as a bit self-righteous. I know it isn’t intentional; folks just feel strongly about their beliefs and helping others can be one of the truest values of money. As someone who prefers to give back in ways other than money, however, I… Read more »

Mafera
Mafera
8 years ago
Reply to  Katie

Great comments and awesome article. Money topics are hot topics, require commitment to stick to a budget, sometimes more challenging for relationships particularly in married couples. At the heart of the value system and require resilience. Easy to want to be like Jonesses, but difficult to realize when it’s time for lifestyle overhaul. On charitable gifts, there is more meaning to me to give my time than money, yes when you deal with feeding the hungry, they need food, but above all they need love and self believe in themselves and the universe that yes they can achieve the life… Read more »

Traci
Traci
8 years ago
Reply to  Janette

I believe it is lifestyle creep because she was not aware that they were giving an additional $200 to charitable causes.

No matter what you are giving to or why, if you didn’t realize that your giving has increased $200 your budget is going to be inaccurate.

Well Heeled Blog
Well Heeled Blog
8 years ago

I have experienced lifestyle inflation since I was in college – definitely, and some of that is conscious spending and some of that is budget creep (and some is just plain ol’ inflation!). But like Nicole, I don’t think budget creep is ALWAYS a problem – it’s only a problem when your expenses are getting in the way of fulfilling your financial goals, which includes a healthy retirement saving rate. Sometimes you can take a look at your spending and realize that you DON’T want to have to shop for bargains every time you go out and that you DO… Read more »

Money Wizard
Money Wizard
8 years ago

I definitely agree with you on happiness being a very important factor. If you’re not happy, it is infinitely more difficult to keep with a budget so making conscious choices to do the things that keep you happy are worth it, if they are within your means like you said.

While money is very important, you can’t focus on it to the point of making yourself unhappy because then you are just defeating yourself.

Holly
Holly
8 years ago

ITA. One of my projects the coming year is to work on strategic lifestyle creep. I’m middle aged and financially settled, but my kids will be kids for only a few more years. I’d like to enjoy that time with them.

Money Wizard
Money Wizard
8 years ago

One thing I like to do to prevent acquiring extra clutter and helps to keep with the budget is to sell similar or related items before purchasing new ones. For example, before acquiring more clothes, go through and get rid of the ones you don’t wear. This also helps you to get an idea of what your ACTUAL wardrobe is before you go shopping. Before I buy a game, I usually trade in at least one game or two to make up the difference. Before I purchase something like a digital camera, I would sell my current one on eBay… Read more »

Hannah
Hannah
8 years ago

I recently had a child and while my budget was ready for all the real added expenses, I did not consider the creeping added expenses. We feel rushed more and so find it easier to justify eating out. We feel like we have less free time, so feel like we deserve to spend just a little extra on something nice for ourselves. All told the creeping costs are probably adding up to more than what we spend on our little guy! I need to really reign this in and find a way to not let myself get swept away in… Read more »

Kaytee
Kaytee
8 years ago
Reply to  Hannah

I’m nervous about this happening to us when our little one arrives. I’m trying to prepare by freezing meals ahead of time, but that will only get us through a few weeks after the birth. Once I go back to work, it’s going to be a lot harder to fit everything in.

Nina
Nina
8 years ago
Reply to  Hannah

The same happened to us when our now toddler arrived a few years ago. The first few weeks we subsisted on food people brought over and eating out. Then gradually as more time became available, we started with one day of cooking, then two, and kept adding til we were able to cook the whole week again.

Peggy
Peggy
8 years ago
Reply to  Hannah

We’ve found that there can be creep in the other direction too, with children: it’s harder to get out shopping, harder to enjoy a nice meal out, harder to travel, so we spend less money on those things now.

Andrew
Andrew
8 years ago

Lifestyle creep? Just sounds like life, to me.

cc
cc
8 years ago

reminds me of an old fable i read about a guy who buys a new housecoat, then decides his furniture isnt up to snuff for the new fancy coat, then he needs new clothes to go with it, at the end he’s completely re-purchased everything he has, just to go with the coat. with that in mind, we finally bought a couch (no hating- we didn’t have a couch for four years, and we paid cash for it), but now the tv is too small, you can’t see it from the couch (commence hate). we’re saving up for a new… Read more »

Marsha
Marsha
8 years ago
Reply to  cc

When I redo one room in my house (paint, new drapes, maybe some new furniture) it makes the other rooms look shabby in comparison. So on to the next room, and the one after that, etc. By the time I get all the rooms done–years later–the first room need redone again. It’s a never-ending cycle.

cc
cc
8 years ago
Reply to  Marsha

oh man, that’s bad news. i was just looking at another room and thinking “boy, if i could put a little loveseat in here and some new curtains….” but yeah i can see that just being entirely cyclical.
i wouldn’t mind doing some small upgrades here and there, but In This Economy it’s gonna be a while before we can do anything….

Kaytee
Kaytee
8 years ago
Reply to  cc

I think that depends. Would these upgrades all have to be new? I bet you could do it on the cheap utilizing things like craigslist, freecycle, saving up, etc.

Rosa
Rosa
8 years ago
Reply to  cc

Cycling through rooms like that – especially if it is cheap things, like painting, rearranging, detail cleaning, changing decorations, reupholstering – is a really good way to keep the house updated in a way that will keep you from “needing” a new house, or a remodel, or really needing to update everything at once because you want to sell.

Amy F
Amy F
8 years ago
Reply to  cc

Oh, that was us last year! My aunt and my sister were trying to be nice and gave us a new flat-screen TV to replace our old clunker. But our Tivo (that we’d paid for lifetime coverage) didn’t work with it, so now we have to pay $20/mo for Tivo. And then we decided to get Netflix because we wanted to watch movies again with a bigger TV and now we have that expense. We’ve managed to avoid cable, but our fancy antenna is so bad that eventually we might succumb. I was happy with the bad old TV.

Anne
Anne
8 years ago
Reply to  Amy F

Hah! I’ve been there.

Dogs or Dollars
Dogs or Dollars
8 years ago

Our lifestyle ‘creeps’ with shifting priorities. Where my food comes from is increasingly more important to me. So grocery budget is up. However, dining out is way down, because I don’t trust the food from many sources (or dont want to patronize them). Buying local more important, but costs more. I’m trying to do all these things without being elitist, and balance it out with quality over quantity, BUT are my expenses up? Yes.

Kaitlyn
Kaitlyn
8 years ago

This is a very timely post for me. I’ve definitely been experiencing some lifestyle creep. Some of it is deliberate (you can pry my iphone from my cold, dead fingers), but some of it is not (takeout midweek and an expensive dinner out on the weekends? Bad!). I really struggle with acceptable lifestyle inflation. On one hand, I want my quality of life to increase. I worked my butt off to get my two degrees and now to advance at my job. Part of that working so hard is what leads to all the eating out. OTOH, I don’t think… Read more »

Sam
Sam
8 years ago
Reply to  Kaitlyn

I’m with you, but trying to find balance. If I work 12 hours a day in my job I think its okay to order in lunch or pick up take out on the way home. I don’t want to spend time grocery shopping or cooking (which I don’t enjoy) after a long day at the office. We’ve got our debt paid off except the mortgage so our focus is more on how to save more. I’ve been challenged recently by someone I respect that I should be saving more. I’m looking at this and studying our numbers as I prepare… Read more »

Threadbndr
Threadbndr
8 years ago

It’s so hard to avoid the ‘creep’. I badly want a smartphone and my old cell is dying.

The thing that keeps me in check is that when I budget, the charity and saving comes out FIRST, then the bills (utility, insurance), then the allocation for variable expenses like food. Then the luxury bills (cable, cell, etc). What’s left is available for splurges and upgrades, but it’s not much.

Jenna
Jenna
8 years ago

I am so happy you wrote about this. My budget was crushed in the last 2 months. Money has been flying out the window… It’s as if you read my mind about what I needed to hear to regain composure.

Jimmy M
Jimmy M
8 years ago
Reply to  Jenna

I’m going to take a guess and say that this is more likely related to the holidays and overspending on gifts.

Phil
Phil
8 years ago

Thinking about all the “necessities” there are today that didn’t exist 25 years ago. Computers, pads, and ebook readers, All the software and hardware that goes with them. Cell phones, smart phones, data plans, and all. Bigger and bigger TVs and cable (for more and more stations) to hook them up. Add up what we’ve spent on all these in the last 20 years, and maybe we all could be millionaires by now. But I love my toys.

Laura
Laura
8 years ago
Reply to  Phil

Yeah, but… A lot of the “necessities” that didn’t exist 25 years ago are just that, necessities, because the infrastructure of society changes to adapt to them. I use a cell phone because pay phones are no longer common and because people expect me to call if I’m running late due to traffic, etc. I use the internet so much more now that using my computer at my job doesn’t work (especially now that I no longer have down time at work) so I pay to have it at home. I’m resisting upgrading to an iPhone or similar with apps… Read more »

Carole
Carole
8 years ago

I don’t think there’s anything wrong with these “little luxuries” if you’re not having financial problems.

Rosa
Rosa
8 years ago
Reply to  Carole

The author says she’s carrying debt, though – isn’t that a financial problem?

For some of us, not meeting our savings goals or not having enough cash on hand to match a sudden opportunity is a financial problem.

Christa
Christa
8 years ago

I haven’t experienced lifestyle creep. The opposite actually. My husband’s been out of state for a few months, and I haven’t been out in ages! i think it’s time to eat at a restaurant when he gets home!

spiralingsnails
spiralingsnails
8 years ago

What I’m having trouble with is how to tell when it is “lifestyle creep” upwards and when it is simply getting more expensive to live at the same level. For example: I know we spend more on groceries now compared to last year, but how much of that is because we added another baby and how much is just excess treats? Most of the personal finance articles I’ve read treat your living expenses as if they remain static over time and urge you to resist lifestyle creep simply by maintaining the same dollar amounts in your budget; they don’t offer… Read more »

Beth
Beth
8 years ago

Not to mention rising costs for food, fuel and electricity! My grocery budget has gone up simply because food is more expensive — and I’ve already exhausted most of the frugal grocery shopping techniques like eating less meat, buying on sale and freezing, etc.

Money Wizard
Money Wizard
8 years ago

Under the context of a budget, the budget is only relevant while the living expense doesn’t change. If there is a valid and noticeable increase in a living expense due to inflation, the budget is now out of date and needs to be revised. This is why living expenses are always treated as static. You also have to keep in mind that a budget is not meant for tracking lifestyle creep. It is meant to help you balance your expenses with your income while assisting you in meeting reasonable financial goals. Unfortunately, some things are virtually impossible to track lifestyle… Read more »

Rosa
Rosa
8 years ago

When I suspect lifestyle creep on groceries and fuel, I try to track need vs. want for a month or two – grocery checkers don’t mind ringing you up twice, if you divide the load for them at the checkout. They’re used to doing it for taxable/exempt and WIC/non WIC. And it’s not super hard to note mileage in a notebook as “need” or “want” if you can force yourself to do it. A lot of times the checking solves the creep on it’s own – do I really need to spend $20 a week on ice cream, fruit snacks,… Read more »

spiralingsnails
spiralingsnails
8 years ago
Reply to  Rosa

Thanks for the tip! Even if I don’t actually ring them up separately, I think piling all the nonessential treat foods at one end of the conveyer will make me more aware of how many “just one”s I’m getting each trip.

EEC
EEC
8 years ago

I put the “needs” in the buggy and the “wants” in the top portion of the cart (where my purse sits). This helps me actually see the damage that I am doing.

Linden
Linden
8 years ago

This is something I’ve been thinking about lately. In the last year, with two small children, our budget has increased significantly in several areas: Childcare (i.e. babysitters) Preschool costs Gym membership Cleaning service Now, these are all things we can afford, as our income has also risen and we are in good shape financially. However, it worries me that we are getting used to these “luxuries”. I have a goal to quit my (high-paying) job in the next 5-10 years and at that point we will need to be able to live within the means of my husband’s (lower-paying) job.… Read more »

Tyler Karaszewski
Tyler Karaszewski
8 years ago

I hate that the personal finance community online views it as failure to have an improving lifestyle.

Nina
Nina
8 years ago

I think it’s bad in her case because she has clear goals in mind, and her lifestyle creeping is hindering her from reaching those goals within the time she hoped.

If she didn’t have these specific goals then I think she will have more leeway to spend a bit more.

Courtney
Courtney
8 years ago

Seriously, I was frowning the whole time I read this article. Yeah, our lifestyle has increased over the past 5 years. But our income has DOUBLED over that time period. Heaven forbid we spend a little more of it. We still save 41% of our after-tax income.

Jen
Jen
8 years ago
Reply to  Courtney

If you’re still saving the same percentage and your income has gone up, I’d say you don’t need to “frown” at this, just nod your head and think, hmm, that doesn’t apply to me.

She’s talking about how saving/debt paydown wasn’t happening as fast as it had been. Not about ever increasing savings!

Turns out, not every article here will be about people lucky enough to have had a doubling in income!

Nicole
Nicole
8 years ago

Upon rereading the article, I guess they still have 7K consumer debt, so it’s like they’re spending 7K they don’t actually have.

Beth
Beth
8 years ago

I hear you there — sometimes I get sick of hearing the whole “earn more money and save it all to get ahead” line. That’s the excuse I’ve been using to not give up my crappy apartment and admit I’m an adult and can afford something decent. In this case, however, it’s the fact that they let their lifestyle increase without first meeting their financial obligations (i.e. debt) that’s the problem. When I was in debt (student loan), I felt too guilty to allow my lifestyle to creep upwards. Now that I’m out of debt I’m trying to find some… Read more »

Tyler Karaszewski
Tyler Karaszewski
8 years ago

You guys are basically right about her $7k in debt. If her goal is to pay that off, then she’s been mis-prioritizing her spending.

But that doesn’t make an improving lifestyle a bad thing, which is how the article is framed. I mean, the title is: “Detecting and Preventing Lifestyle Creep”. It should be titled, “Losing sight of your priorities” and focus explicitly on where she went wrong with paying off her debts.

Otherwise, it should be a completely different article about how to *improve* your life, not how to avoid improvement.

Nicole
Nicole
8 years ago

Yeah, that’s why I made that point back up in comment #2. I didn’t catch the 7K debt in my first read-through.

less
less
8 years ago

There is a fundamental difference between “improving your life” and “lifestyle creep” — the former is conscious, the latter is unconscious.

If your spending is going up because you decide you enjoy eating out and want to eat out more, or because you want to support charities you believe in, or becaue you want a bigger tv to watch football games on, then that’s one thing.

However that is not what this post is about.

This post is about having your spending go up because you’re not paying attention. And that’s not improving your life, that’s budget creep.

Kathryn
Kathryn
8 years ago

There’s been some fairly significant lifestyle creep in my life, but I’m okay with it. I have zero debt and am saving nearly a third of my net income. My net income will increase nearly 10% in 2012 as my daughter goes on her employer’s insurance, so as well as another bump to my savings, I’m considering gifting myself with a smart phone and the data plan to go with it. This won’t happen until after the end of January when I can see exactly what to expect from my income. Is it still creep if it’s planned?

Kfish
Kfish
8 years ago
Reply to  Kathryn

No, I think ‘creep’ refers more to unconscious increases in spending. It’s the lack of awareness that makes it dangerous, I believe. Consciously deciding that you can afford something better could be a different type of error, but it’s not creep.

Sam
Sam
8 years ago

Yeah, we are working on this. We are really drilling down on the numbers as we put our 2012 annual spending plan together (which is our basis for our monthly spending plan – our form of a budget). I’m looking at each category, not just copying the numbers from last year’s plan and figuring out if the numbers have gone up. Some have, food costs are higher, fuel costs are higher, utilities are also higher. And figuring out where we can pare back on our discretionary spending, eating out is a big one for us as well. And also looking… Read more »

NuShrike
NuShrike
8 years ago

For the iSheep, do you really need unlimited data and texting? If you’re surrounded by WiFi a majority of the time, there’s no reason to have unlimited data. That’s ~$25 per month or $300 per year. Then look at do you really need 4GB, 2GB? Sure you like to stream, but can’t you cache or find another offline method? Unlimited SMS/texting, another carrot many bite into without thinking. That’s at least $10+ per month ($120 a year!) for something you can easily work around with textPlus, KakaoTalk, iMessage, etc etc. Why bother paying subs for texts? This is how carriers… Read more »

Megan E.
Megan E.
8 years ago
Reply to  NuShrike

First, no need to belittle iPhone users. Second, the cheapest data plan is $15 a month ($180 a year) and required for all smart phones.
Second, you are right that messenging is expensive but there are limited options.

Smartphones have their place, I’m using 1 now to type this message! But people should be aware of electronic needs, I agree.

Chase
Chase
8 years ago
Reply to  NuShrike

A little smug about our phone choices are we?

Are you not getting a smartphone to save money, or to feel superior?

And yes, I need all that data and all that messaging because I travel a lot and won’t put myself in a situation where I depend on someone else’s wifi which there usually isn’t at the remote locations I go to anyways.

BB
BB
8 years ago

Just tonight the spouse and I decided that saving 20 cents a serving on bargain salsa just ain’t worth it. If that’s lifestyle creep, so be it.

Emily
Emily
8 years ago

Good advice! Eating out is an expense that ALWAYS manages to creep back into my life.

Courtney
Courtney
8 years ago
Reply to  Emily

I enjoy eating out. I do not enjoy cooking. Thus, we eat out as much as our entertainment budget allows.

Cmt
Cmt
8 years ago

“Ramping up the side hustle income”? Like submitting the same freelance post to two pf blogs in the same week???

Steven
Steven
8 years ago

Spend less on eating out and you might not even need that gym membership. 😉

Michelle
Michelle
8 years ago

Think about value. The smartphone costs me $75 a month where a dumb phone cost $50. But the dumbphone didn’t do anything other than make phone calls, whereas the smart phone lets me email, calendar, use mapping/navigation functions (I don’t need a GPS), look up reviews of restaurants or hotels on the fly to avoid expensive mistakes, and more. The additional $25 is money well spent.

Patti
Patti
8 years ago

I’ve been working this year to reduce grocery spending and have cut over $50.00 a week while actually increasing the quality of the meals. Even so, I realized a couple of weeks ago that the pantry shelves and freezer shelves are overflowing. That is my version of budget creep: I just kept coasting along on my lower grocery amount, so pleased with myself that I didn’t even notice that I still had areas where I was buying too much. These next few weeks, I’m going to be “shopping” for meals from my shelves and from the freezer! I’m looking forward… Read more »

smedleyb
smedleyb
8 years ago

I look at my $370 monthly wireless/cable/internet bill and shake my head in disgust; I promised myself three years ago I would pay cash for our next car yet here I am saddled with $300 a month for another 30 months; I vowed to slash my vacation budget yet spent more on travel this year than I’ve ever spent in my life; my basement renovation is already $1000 over budget, but I need $3500 more to finish off the wall to wall carpeting; throw in another couple thousand on splurges for a new bed and skis for the fam —… Read more »

mike
mike
8 years ago

Well just my 2 cents on this. We are trying to save for my first house down-payment. Meanwhile our landlord increased our rent with 5% and the internet /cable provider increased the bill by 10% (end of the “promo” period). The only expense we made consciously was to buy some smartphones (Htc Desire S and Wildfire S) with a data and voice plan and 2 years contract. Also for us making that expense (recurrent) costs us in the end only 10% more than our previous contracts (without data plan or smartphones). We wanted to buy a house in 2012 ..… Read more »

Michiel
Michiel
8 years ago

One easy but extremely powerful trick: whenever you get a raise, increase your monthly automatic savings amount by 50% of your raise. (We have an automatic transferal to a savings account on the day after pay-day)

This way, your raise translates to higher net income each month, but also a higher savings amount. This leads to a financially solid and affordable life style inflation. I’ve been doing it for the last 10 years and our savings % has risen from initial 20% to 31% now.

Trina
Trina
8 years ago
Reply to  Michiel

This is a good idea. My 401k at work also gives you the option to increase your % contribution automatically every year. So, if you normally get a 2% raise, you can set it to automatically increase 2% every year, and you won’t notice any difference in your paycheck.

Of course, I don’t know how this will work in the years you get no raise, or even a pay cut.

Jen
Jen
8 years ago

It looks like part of the reason for the creep is that your savings/overflow is just the excess, not its own line item?

That is, if you paid that first, you’d have noticed when the other expenses crept upward because you’d be running out of money in a month and had to adjust at the time. Even if the choice to adjust savings down was made, it’s still a choice rather than hidden creeping.

Dee
Dee
8 years ago
Reply to  Jen

This is an excellent point.

Will
Will
8 years ago

Went back to school. Big-name MBA program. Very blessed. Very grateful to be where I am. I had savings for tuition, books, and modest living expenses, but failed to consider “networking” and the huge financial and time costs associated therewith. First world problems, right? Still, it is a challenge to keep strong relationships with classmates (read: prospective employers/partners) when I am unable to afford a lot of the MBA lifestyle. I’m mid 20’s and have never made >40k. As a full-time student, I’m hemorrhaging money thanks to the “requirement” of going to Not Cheap class events. No credit card, no… Read more »

bobj
bobj
8 years ago

Now that I am 57… the Lifestyle Upgrades are OK. (as long as they don’t get out of hand) After all, I worked hard all my life and it’s time to enjoy.

Kraig Mathias
Kraig Mathias
8 years ago

I’m 27 and have been living on my own for over 4 years now. My lifestyle creeped up massively during that first year. After a lot of spending, a lot of bad decisions and a very scary economy, I decided to turn things around. Last year I spent less than I did that first year out of college on my own. I am noticing now though since I am out of debt and have an emergency fund in the bank that my lifestyle is starting to creep up a little. I find myself putting off getting groceries for a few… Read more »

Anon
Anon
7 years ago

How come some of you save more than a quarter of your income?

Money in the bank that isn’t going toward a goal isn’t being put to use by spending or giving.

Isn’t being wealthy the quality of life you lead rather than numbers in a bank account?

Lisa
Lisa
7 years ago

I can totally relate to this! My boyfriend and I are foodies and there are so many amazing restaurants in Portland. We definitely suffer from the lifestyle creep in terms of eating out. I use daily deals a lot to save money, but still…when it gets to be too often I put the brakes on!

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