Here Are 5 Ways to Prevent Lifestyle Creep

If your job gave you a raise next week, what would you do with the extra cash? Would you order the most expensive wine bottle in your celebratory dinner? Go on a shopping spree and buy things you never thought you could afford? For many people, the natural excitement that comes with additional income results in an innate desire to spend more. 

This phenomenon is called “lifestyle creep.” 

It happens when what you once considered as “enough,” like thrifting your entire wardrobe, is no longer satisfactory after your discretionary income increases. It makes former luxuries — like designer jeans — seem like new necessities. This is often what keeps people in what seems like a never-ending financial trap. 

Some expenses, such as those that improve your standard of living, may be justified. However, to avoid the lifestyle creep cycle, it’s important to clearly define what’s a necessary expense. We put together these tips to help you keep this creep at bay.

Create a Goal-Based Budget

As with any financial plan, it’s important to set a plan to set yourself up for success. Setting up a goals-based budget allows you to accomplish what your largest financial aspirations are. Many times, these are large ticket items such as buying a house or paying off your wedding expenses. 

Redirecting your raised income toward what truly matters to you can help your real dreams become a reality. As your income grows, allocate additional budget in the categories that matter to you most. 

You can then make a decision on whether you want to increase your budget for non-essentials, too. If you find yourself in situations where it’s hard for you to stick to a budget, you may have to revisit your budgeting strategy. 

Surround Yourself with Like-Minded People

Sometimes many of the decisions we make financially are not made with ourselves in mind, but rather for the people in our lives. For example, your circle of friends might want to make weekly happy hour plans at a swanky restaurant, even though you know it’ll be an expensive event, you may feel inclined to join in as a way to be included.

It’s important that you make decisions that serve your needs. In doing so, you’ll surround yourself with people who are supportive and won’t encourage you to fall into lifestyle creep. A great friend wants to see you accomplish your financial goals and won’t judge you for skipping out on what you know will turn out to be a really expensive night out. 

Avoid Scrutinizing Social Media

Although closely related to our previous tip, it can be even more impactful to avoid being swayed by any of the people who are not in your life, but are present in your social feeds. These are usually celebrities and influencers who portray their life with grandeur and excitement. 

Keep in mind that like advertisements, all of the images you see are carefully curated, sometimes sponsored, and are specifically created to sell a certain image. Avoid following accounts that encourage you to spend toward a skewed portrayal of success.

Visualize Your Goals

With the power of visualization, you can start seeing yourself achieving the goals you had in mind. A way to do this is by creating a vision board. Vision boards are a powerful tool to help you remember what matters to you most.

If the crafty work isn’t your strength, you can also set up a digital board on Pinterest with healthy images of financial success and depictions of what might be the most important in your life. When you have a desire to spend on something you know is unnecessary, you can refer back to your board and decide whether you want to go through with the purchase. 

To help you get started, check out The Gym’s financial pins on Pinterest. 

Treat Yourself, Strategically

With a budget set in stone, it’s much easier for you to see how much you are putting toward your real financial goals. If you do want to treat yourself after a hard-earned raise — you worked hard to earn it, after all — you can set aside money every month into a special “me” fund. This becomes a separate budget from your necessities and there’s no guilt about spending on what you want, because it was a deliberate action. 

You can decide how much to allocate as long as it’s a small portion of what’s left over after you’ve budgeted for your necessities and goals. Many times joy can be found in the unplanned moments but ironically having a plan for those enjoyable ad-hoc expenses keeps lifestyle creep away. 

Ready to take your finances to the next level? 

To get started, schedule a free 20-minute consultation call to speak to a member of our team. We will ask you a few basic questions to get to know you more, walk you through our financial training program steps, and of course answer any questions you may have. No pressure to join! Need advice quickly? Talk to one of our Trainers on Demand.