Getting Lifestyle Creep Under Control

The following post is by MPFJ staff writer, Marie. You can read more of Marie’s articles over at her own blog, Family Money Values. Enjoy! 

Have you ever wondered why you are still short at the end of the month, in spite of that raise or promotion at work?  You may be suffering from lifestyle creep – that silent condition that instantly devours any disposable income you think you have.

Moving up in the world is commendable.  You start out in adult life with less – less than you were used to at your parent’s house, less income than you expected to have and bigger expenses.  Over the years, though, you notch yourself up on the pay-scale, perhaps celebrating with a new car, or more amenities.  After all, you deserve that for working hard and making good, right?

Yet, contrary to expectations, you are not meeting your goals towards saving up for the down payment on that dream home, trip-of-a-lifetime, or college expenses for your kids.  That’s lifestyle creep.

Once you realize this might be the case, here are some suggestions for dealing with it.


Identify where the creep is occurring.

Make a list of all expenses.

First, look through and list last year’s expenses – checks written, withdrawals (including debits), things bought with cash, credit card bills, interest and payments on all loans.  Include it all – utilities, subscriptions, rentals, trips, medical, dental, insurance, gifting, everything.

This is no fun and will take awhile, but it is absolutely essential to being able to see where the creep happens so you can deal with it.

Next, make a list of future goals and what you now do towards them.  How much do you contribute to savings for retirement, for college expenses, for that new car or house or other big purchase?

Analyze the information you gathered.

Categorize your expenses.  Note, if you are working from a budget, you probably already have them categorized.  If not, this categorization could be the foundation for a budget.  (I  know, the B-word elicits horror and anxiety, but budgets of some sort are desirable).

Then evaluate whether you need each of the things causing the expense.  If so, think through how you might be able to (relatively painlessly) reduce that expense.

Do you use multiple TV/Movies subscription services (for example Netflix AND cable TV AND HULU AND Amazon Prime)?  Do you really need all of them?  Which do you use most often?

Finally, review how you got started with those expenses, was it conscious or spontaneous?  Knowing this will give you insight into how to better control future lifestyle creep.

Take action.

You spent all that time listing your expenses, then evaluating them, now is the time to decide what to act on.  Look for things that will give you the most savings with the least disruption to your lifestyle.

Sometimes, that may even mean spending a bit more money.  For example, if you have determined that your heating or cooling bills are too expensive, you may decide to buy a programmable thermostat to automate setting temperatures in the house up or down when you are not there.

With other items, you may decide to try to alter your (and your family’s) habits.  One example might be to institute a cooling-off period prior to buying anything with disposable income.  For instance, if you are wanting that new TV, forcing you to wait until they go on sale can a) make you realize you don’t really want or need it all that much or b) give you time to do more research as to what kind you want and the best place to get it or c) help the kids learn delayed gratification or d) let you save up for it instead of putting it on the credit card and paying high-interest rates until you pay it off.

Once you’ve trimmed off the fat on your expenses, use that fat to go towards your goals. Set up auto options to take part of your paycheck and put it to work in a savings account or investment.

Then, start doing a better job of tracking expenses as you go.  I know that when I charge something on your card it is harder for me to remember that it is there than it is when I write a check.  Likewise, when I get a bunch of cash out and spend it, it is difficult to remember exactly where that money went.  Set up a system that works for you and your family so that all know where the money is going.

Plan to avoid future lifestyle creep.

This plan should include methods to alter habits creating needless expenses: techniques to contain spontaneous purchases and a schedule to review your lifestyle creep situation at least once a year or so.

The plan could specify dates to review and negotiate ongoing bill creep (like those ever increasing cable TV bills).

It could include time once every couple of years to go through the entire above process again, or to do so whenever the family income increases.

It could even extend to taking that ‘B’ word seriously and create and stick to a budget.

How about you all? How have you handled lifestyle creep?

Share your experiences by commenting below! 

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