The Shackless of Debt

Lifestyle Creep: What is it and How Can you Avoid it?

The idea of anything creeping in uninformed can affect even the bravest of people. Maybe you have advanced in your career or gotten a full-time job. Whichever way, making more money most times attracts spending more and therefore makes you vulnerable to lifestyle creep.

Probably, you now shop frequently and instead of cooking, you prefer to order takeaways. However you got here, you now have more cash in flow and instead of saving, you chose to balloon your lifestyle. 

Meanwhile, the considerable question to ask is, what is enough? Because without much thought, all these non-essential bills lead you to an uncomfortable growth and potential debt. Well, you may want to first consider what lifestyle creep is, so read on.

man holding and counting dollar bills whilst sat in his car

What Is Lifestyle Creep?

Lifestyle creep occurs when your standard of living improves just as your income rises and former luxuries become a necessity. Now, a rise in discretionary income can happen in both ways; either through an income increase or a decrease in costs. 

The basis of lifestyle creep most times is a change in thinking and an attitude exhibition that sees spending on wants as a right rather than a choice. Again, it circles seeing spending decisions of yourself as “you deserve it” rather than thinking of better ways to utilize the money.

Moreover, a lifestyle creep can edge out your big financial goals such as emergency savings, retirement funds, etc. And because it doesn’t give notice, it creeps on you even without you realizing it. Then, at the end of the day, that generous income you’d hoped for might place you on the verge of unaffordable amounts of debt. 

This is heavy spending and it takes toll on you. If you keep on with this fun-filled lifestyle, you’ll end up finding it hard to pay your bills. 

Several ways that lifestyle creep may occur:

  • Eating out expensively and more frequently.
  • Spending dollars on coffee per day.
  • Opting for expensive clothing, in a case where less expensive ones will suffice.
  • Flying premium economy more often than normal.

How To Avoid A Lifestyle Creep?

If you desire to continuously improve your lifestyle, then it’s not generally a bad thing. You just have to be mind conscious as lifestyle creep makes you feel like you’re progressing. And yes you are in the actual sense, only that you’re adopting the wrong method. 

A principal way to fight lifestyle creep is by carefully discerning wants from needs and making good budgeting. To keep your spending in check, you may want to consider these steps:

#1. Draw A Monthly Budget

Creating a monthly budget is as good as reshuffling it as your income increases. That way, every add-up to your income is also a boost towards your financial goals. You may also want to consider the 50/50 thumb rule where half of your money should go to savings and the other to expenditures respectively. 

#2. Set Long-term Goals

Setting big long-term goals for yourself serves as a leg up towards a non-creepy lifestyle. Goals like this set you in a long run and give you other sunsetting ideas to focus on. These may include a house, land assets, or even retirement as the case may be. 

#3. Automate Your Savings

In a case where your discipline may fail you, then you can opt for automatic savings. Automatic savings will help prevent you from spending out of your budget. This is a great way to say goodbye to a lifestyle creep. 

#4. Make Plans For Retirement And Fluctuations

When you set your mind on future occurrences of fluctuations, you can swiftly escape a creepy lifestyle. The same applies to your retirement plans, this paves way for your mind to think more about the future than the present. At the same time, it positions you with a wider range of life options. 

Bottom Line

Although an increase in income is supposed to be good news, it can turn sour if you don’t learn to manage your money properly. You can avoid lifestyle creep by following the steps provided in the article.

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