Avoiding the lifestyle creep

Or, why a pay rise shouldn’t equal a more expensive lifestyle.

It happens to the best of us. That alluring siren call of a better, more luxurious life as soon as the money starts coming in. Those shiny new cars, lavish vacations, and dream houses suddenly seem within reach. But, let’s step back and assess the real cost of these decisions.

At its core, lifestyle creep represents an increase in one’s standard of living in response to a rise in discretionary income.

It’s the subtle, yet steady, upping of expenses as one starts earning more, often without realizing how these choices can impact long-term financial health.

Many of us are familiar with these thoughts:

  • “I got a raise, so I can afford a new car.”
  • “I got a bonus, so let’s upgrade our vacation.”
  • “I’m earning more, so why not move to a bigger house?”

It’s tempting, right? After all, everyone around us seems to be upgrading, so why shouldn’t we? But here’s a transformative idea: what if we recalibrate our reactions to increased earnings?

The “So I should” approach

Instead of getting swept away by every opportunity to spend, let’s adopt this paradigm:

  • “I got a raise, so I should increase my savings.”
  • “I got a bonus, so I should invest it wisely.”
  • “I’m earning more, so I should secure my future.”

By shifting our mindset, we stop letting lifestyle creep dictate our financial choices. Instead, we use our resources to bolster our financial strength and resilience.

The real cost of lifestyle creep

Lifestyle creep is more than just spending money; it’s the gradual process of moving away from our financial goals. It’s essentially paying a price now, for a future we haven’t planned for.

Making bold, intentional choices and adhering purposefully to a budget keeps our dreams and goals within reach. When our choices are guided by thoughtful planning, wealth doesn’t remain just a distant dream—it becomes an achievable reality.

Your path to wealth and success

Remember this formula: Discipline leads to thoughtful planning, which in turn leads to wealth. When we keep our eyes on our long-term goals and avoid the short-term distractions, success becomes inevitable.

Your challenge

So, next time you find yourself faced with a tantalizing spending choice, ask yourself: “Is this truly in alignment with my financial goals?” By embracing a conscious and strategic approach to money, you pave the way for a brighter, wealthier future.

P.S. What steps are you taking to sidestep the lifestyle creep trap? Your future self will thank you for the wise choices you make today.

Follow Luca Caruana’s weekly column here, and his LinkedIn account or his Instagram for more budgeting hacks. For other money-related columns, check out Luca’s tips for when your income drops, and his advice to help change the narrative about women and money.

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