When people start earning more money, naturally we want to spend more. After all, we worked hard for it, and don’t we all deserve a little treat from time to time? Well, the personal finance folks have a name for this phenomenon: “lifestyle creep.”
Maya Rudolph in the robes looking puzzled and saying “What?”
Apple TV Plus / via giphy.com
As certified financial planner Danica Waddell, founder of Zena Financial Planning, told me, “I would define lifestyle as a scenario where you get a raise in your income and spend all that ‘extra’ income on day-to-day expenses.” If you don’t save any of that extra money intentionally, chances are pretty good you’ll just spend it. It’s like going to a nicer grocery store, getting your nails/hair done more often, or eating out more. Things can happen.
Often, lifestyle creep is portrayed as one of luxury and extravagance. Like, do you really need a flashy car or a new phone? But lately, on TikTok, Twitter, and even Reddit, I’ve been seeing people asking the question: Is this “lifestyle creep” or are you just taking care of yourself?
a twitter user wrote“People almost never talk about how ‘lifestyle creep’ isn’t so much spending on luxuries when you start making more money, but also all the life maintenance things you couldn’t do before. , get really expensive, like dental work or car repairs.”
person saying “it’s true”
Pop TV / via giphy.com
The tweet has been viewed nearly 3 million times and was shared on Reddit, where users weighed in with what their “lifestyle creep” looked like. One user wrote, “My favors when I get good money? A set of prescription and kitchen knives that actually cuts things. And pays bills on time.” Another person said, “When I finally got a job, I had to pay $15,000 in dental work. It took years to pay off. I’m still paying off credit card debt from years ago. Poor It’s expensive to be.”
And meanwhile, on TikTok, 27-year-old Chelsea Macklin (@chelseabychance) also discussed the issue with a video that’s creating buzz. She made her video in response to a TikTok that used a $500 gym membership as an example of lifestyle creep. “I just don’t see regular people doing it,” she explains.
In the video, she says, “What I’ve found is that most of what happens with lifestyle creep, you start living the way you deserve to live.” And she continues to exemplify it, from small luxuries like springing for two-ply toilet paper to big purchases that can affect your health, like finally upgrading your lumpy old mattress. She concludes by saying, “None of this sounds like bad financial spending to me. It seems fair enough.”
And in the comments, Chelsea’s message is really resonating with those who say that examples of “lifestyle creep” are all things we’d call “necessities” if we lived in a reasonable country — like going to the doctor. Go.
I have to say, I can really relate to all the people who are saying this. As such, my biggest “lifestyle creep” has been having health insurance and actually ~using it. And even though I can finally take care of myself this way, I still feel guilty for my increased spending. To be honest, it’s kind of mindfuck.
Woman opening and chewing a bottle of wine with her teeth
I also suspect that stagnant wage growth since the 1970s, along with the rising cost of housing and education (and, y’know, inflation), means that more Millennials and Gen Zers are opting out of these types of jobs than are needed. Are. The generations before us were at our age. But we should be able to take care of ourselves with a full-time job, and not feel guilty spending on the basic things we need to be happy and healthy.
I asked Waddell as a Certified Financial Planner for his take on this conversation. She said, “Personally, I do not consider myself to be able to pay for a lifestyle necessity. An increase in income can cover a lifestyle deficit, but paying for dental care or car repairs is within my reach.” Opinion won’t qualify” So there you have it from a pro – go do what you need to do, guilt-free.
Isabel Pavia / Getty Images
And she also offered her advice for those just starting to make more cash and don’t want to fall into the lifestyle creep trap. “First, make sure you’ve paid off high-interest debt (i.e., credit cards) and have an emergency savings account. Next, look at your goals and make sure you’re actively saving toward them. – This can mean saving for your company’s 401(k) while also building a fund for a future down payment on a house.”
She adds, “Finally, pick one or two things that you will allow yourself to spend on. It’s perfectly fine to increase your spending in some areas, but I don’t recommend that you take that strategy across the board.” Adopt throughout. For me, one of the greatest joys is being a clean person. I want to continue to live (and spend) on other things, like cars, so I can spend on things that really matter to me. enhance the overall quality of life. But that choice will be different for each person.”
And she cautioned, “Once you get used to a certain level of spending, it’s very hard to reduce. Over time, you can gradually raise your expectations as you travel.” are, how much are you willing to spend on eating out, etc.”
As for Chelsea, she said, “I’m not a baller by any means, but my quality of life has improved a lot over the years. My mom actually warned me about the lack of lifestyle. She Told me to save all my money. He joked that my money was burning a hole in my pocket. But I was like, ‘What’s the point of making more money if not to improve how I live? ?’”
She continued, “Spending a dollar is exhausting, and the changes in my life have made me so happy. I have a gym membership where I can take Zumba classes. I often shop for quality groceries at Whole Foods.” I buy produce and I don’t feel like cooking when I get takeout. (It’s been the best!) I go out for drinks. I sometimes go to a day spa. And yes, you can say Maybe these are unnecessary, but they are things that feel good to me physically and emotionally.”
In conclusion, Chelsea said, “We sacrifice a lot of our present for our future. I’ll always set aside money for a rainy day, but I’m trying to enjoy the sunshine!”
David Rose from Schitt’s Creek saying “absolutely”
CBC / via giphy.com
What do you think of this lifestyle creep conversation? Is there something you’ve been putting off that you’ll have to deal with when you make more money? If your salary has increased, how have your expenses changed? Let’s talk about it in the comments!