I Fell Victim to Lifestyle Creep- Find Out How I Overcame It, and How You Can Too!
- Shai-Lin Gothreau
- Apr 11
- 3 min read
Picture this: You've been at your company for almost 4 years now, and each year you've gotten a decent raise and a bonus. Over time, your salary has increased to the point where, on paper, you feel like you're making a decent income. But when you look at your bank account, you're thinking "Where did that money even go?".
If you're reading this and thinking, "Wow, this is what's happening to me" you're not alone. The majority of people feel, or have felt, this way - including me.
This is called lifestyle creep: the pattern of spending more money as your earn more.
In this post, I'll share how I fell into deep lifestyle creep, how I overcame it, and how you can too!
My Lifestyle Creep Experience:
In my first job out of college, I was making more as a starting salary than my mom ever made in her tenure of teaching. I had just moved to a high-cost-of-living city where my fixed expenses were slightly over one paycheck each month. Within my first year, I received a raise and bonus, and I thought to myself, "Finally, I'll be able to save more".
But the following year, month over month I continued to see little improvement in my savings. I'd gotten a raise that should have equated to an extra $300/month after taxes, yet I was growing increasingly frustrated that the money seemed to disappear each month. I mean, sure I had treated myself to an extra dinner once in a while, got boba when I felt like it, had my nails done, and went on the ~ occasional ~ weekend trip, but I justified it by telling myself, "I'm making good money, and I deserved to spend some of it."
The truth was, I was making more money, but I wasn't managing it any better. At the time, I didn't have a formal budget. I'd get paid, check my balance in my checking account, and mentally track my expenses to make sure I didn’t go over my income. It wasn’t until I started keeping a real budget that I realized how much I was spending each month, and where that money was going.
Budgeting saved me from the lifestyle creep cycle.
Embarrassingly, I was spending upwards of $40/month on boba! Once I started tracking my income and expenses, I was quickly able to cut back on things seemed like small expenses but added up over time. I didn't cut my boba trips out entirely, but I became more aware of my financial choices, and allocate an amount each month for discretionary spendings.
When I moved to Texas, I could have easily fallen into the same pattern of taking on high fixed expenses because, technically, I had the income to make it work. Instead, I moved into an apartment with a roommate, which allowed me to split expenses and lower my monthly fixed costs. I learned from past mistakes and, rather than viewing the extra money as more to spend, I automated the extra money into my savings and investment accounts.
Over time, I changed my mentality from believing, "extra money = more spending" to, "extra money = 50/50 spending and savings".
How to Overcome Lifestyle Creep:
Lifestyle creep can affect anyone, from everyday earners to billionaires. It can happen after you get a raise, receive a bonus, pay off a debt, or switch to a higher-paying job.
So how do you overcome it? It only takes three steps:
1. Realize you're in it
Does this post sound all too familiar? Recognizing you're caught in the cycle is the first step towards
2. Want to get out of it
Have a "Come to Jesus" moment where you decide you no longer want to be controlled by lifestyle creep.
3. Commit to making the necessary changes
MakTake the tough steps to regain control over your finances. (Hint: A good place to start is with a budget!)
As I wrap up this post, I want to remind you that the majority of us have experienced, or are currently experiencing, lifestyle creep. You're not alone! As you work to overcome it, remember it's OK to have small splurges. It's also OK to fail at budgeting when you first start - I certainly did! Managing your money takes time and practice, but with each month, I promise it will get easier.
Important Disclosures: Infinity Financial Services is a registered investment advisor offering investment advisory services through Core Planning, LLC. Registration does not imply a certain level of skill or training. This blog is for personal finance education, not advice, and you should consult with your own adviser before taking action. Please click here to read the full disclosures.
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