This idea of “keeping up with the Joneses” is much less tit-for-tat than it’s painted out to be.
Here’s my recent keeping up with the Joneses story…
My husband and I purchased a home in a nice neighborhood a couple of years ago. We upgraded a bit in terms of space; our previous house was around 800 square feet, our current one is 1200. Already that means we are spending more to heat and cool the house. Our previous yard was an overgrown mint garden; now we have a few square feet of a real yard. Those are the “obvious” lifestyle creep items.
The subtler ones look like becoming a regular at a conveniently located deli drive through. Justifying the price to pay for parking downtown because I walked to work that day. Upgrading to the pre-made fruit plate instead of making a fruit salad for the neighborhood potluck. These, my friends, are examples of lifestyle creep.
“Lifestyle creep” or “lifestyle inflation” is when a person starts spending more money once they start earning more money. Seems a little odd, right? Isn’t the point of a raise to help you afford some of those things that had previously been out of reach? I’m here to tell you that this is a slippery slope. There are healthy ways to manage the increase in income or decrease in debts owed.
Lifestyle creep has to be one of the most significant issues I see with people in their 30s.
It’s as though they forget that they were able to subsist off of ramen and happy hours 5-10 years earlier. I’m not advocating for a continued version of your 20-something-self’s lifestyle. With social media continually selling to us, it makes it much harder to escape the desire for additional things. My Instagram feed is full of ads for shoes, dog toys, and sales pitches for freelancers promising me a 7-figure business after signing up for a life-changing webinar. The temptation is real to add a few of those things to an online shopping cart, especially when you have more money at your disposal. “I can afford it, now!” you tell yourself.
The good news is there is a way to make more money, have more “things,” and not succumb to spending all your hard-earned money when you start making more of it.
How to Intentionally Avoid Lifestyle Creep
Get some vision-boarding going.
Dream about and write out what you would do with an extra $2, $5 or $10k annually. Would you upgrade your washer and dryer? Put a bit more towards your credit card debt? Take that South American vacation? Or would it be nice to have a bit more fun money each month to not feel guilty about that annual sale at your favorite store? My guess is that this dream seems achievable if you had an additional chunk of money.
Remind yourself of that vision if and when you get your next pay raise. Better yet, write it down in the notes section of your phone. I keep a living Google doc of the things I want to purchase or use my money for that are currently out of reach. I reference it when I earn more money or get a tax refund.
Plan for raises and/or bonuses.
You should be getting a raise annually that at least keeps pace with inflation. If not, take this as a flashing neon sign to set up that meeting with your boss to talk about increasing your income — plan for this raise. Most baseline raises are low, about 2.5% as that more or less captures inflation. When you get that 2.5% bump (going from $95k to $97,375k) pretend that you are still earning you “old” salary of $95k. Siphon off that additional increase in pay and reference the dream you’d written down. See if you can do that thing. If there is additional money left over after funding that dream, throw extra money at your retirement or investment account. That’s how you make a pay raise work for you.
Mind your triggers.
Plan a way that you can have your cake and eat it too. Go back to that list of dream items. Does the flash sale get you closer to achieving that? If so, go for it! If not, hit pause and return to it later.
Now that you’ve planned out what you’ll do with that raise enjoy your higher income! To borrow from Coldplay, life is for living, and making more money makes it easier to enjoy life so long as you do it intentionally.
Lindsay Bryan-Podvin, is the founder of Mind Money Balance (@mindmoneybalance)and the first financial therapist in Michigan. She brings financial literacy to women in an empathic, easy-to-understand way that unravels internalized barriers to feeling amazing about managing money. With a background in mental health research and psychotherapy, she thrilled to offer these unique, and much needed, services in our community. As she is aware that her services aren’t accessible to all, she also volunteers with Circles of Washtenaw County, a program with the goal of breaking the cycle of generational poverty.