What is Lifestyle Creep?
… It’s the big enemy I’m watching out for!
Investopedia gives us a succinct answer. Lifesyle creep is
A situation where people’s lifestyle or standard of living improves as their discretionary income rises either through an increase in income or decrease in costs. As lifestyle creep occurs, and more money is spent on lifestyle, former luxuries are now considered necessities.
My husband and I have remarked to one another many times that we are happy with our current standard of living. We tithe, save for retirement, live in a nice two-bedroom apartment, own two cars, cook a lot, have season tickets to sporting and cultural events, travel often, and spend our leisure time on our preferred activities (him: video/computer games; me: reading). While it certainly would be nice to be able to eat out or buy new clothes more often, we are satisfied.
However, we have reasonable anticipation that our incomes will jump in the next few years when we graduate and start, as we like to call them, “real jobs.” I don’t want our standard of living to automatically jump with those income rises. I saw friends get over their heads with their first “real jobs” after college – buying a new car, jumping into real estate, eating out for every meal – and I don’t want to follow the same path. I want the standard-of-living increases that I’m sure we’ll experience to be the result of deliberate and thoughtful choice, not unconscious creep. And should we get into a situation where we need to cut back on spending, such as job loss/resignation, I want us to know precisely the difference between necessities and luxuries. That is my ideal, at any rate.
Have you become conscious of lifestyle creep in your present or retrospectively? Do you think it’s important to fight it?
photo by eric731
Filed under: lifestyle creep
Lifestyle Increase vs. Lifestyle Inflation: Ikea Furniture
One-Car Lifestyle Update
Is “Live Like a College Student” Good Advice?
Edging toward Quality Food: Proposal6 Responses to "What is Lifestyle Creep?"
Leave a Reply
Recent Comments
- Adam on Home Equity Is Funny Money
"Hi Emily - I just stumbled upon your blog. Great post! Up in Canada this is a…" - Emily on Home Equity Is Funny Money
"I agree that an appraisal is the best number to work with. I can't think of why …" - JL on Home Equity Is Funny Money
"I only note it as round numbers, in $50k or $100k estimates. I also usually upda…" - We Maxed Out All Our Retirement Accounts for the First Time! - Evolving Personal Finance | Evolving Personal Finance on Avoiding an Expensive 401(k) Plan through Self-Employment
"[…] was the first year that we contributed to Kyle’s expensive 401(k…" - Business Goal Tracking for Week 8 of 2022 - Evolving Personal Finance | Evolving Personal Finance on Business Goal Tracking for Week 6 of 2022
"[…] Done as of two weeks ago! […]…"
Since leaving college, working full time, then returning as a graduate student (with a decent research stipend) the lifestyle creep I’ve identified is my willingness to buy local food, cage-free eggs, and higher quality meats despite the higher price, and being comfortable going on more expensive outings (but that’s still with ScoutMob restaurant coupons and student discounts to the symphony). I have a feeling I’m not the norm, though. I’ve heard fellow research assistants (with the same stipend) talk about how they’re going in debt in grad school. I think car payments and bar tabs are big contributors.
In a recent conversation about professional athletes, their standard of living, and unpredictable career length, I realized there are many young professionals who don’t feel the “creep,” or “jump” rather, until it’s too late!
Lifestyle creep is more about lack of intention in spending than any specific spending category – I’d wager that your upgrades in food quality/sustainability and occasional dining out are very intentional! Though I suppose they would fit under the Investopedia definition if they become necessities. I agree that car payments can be a major drag on a grad stipend – I’ve heard the same from a few of my classmates.
I think it’s the unpredictable career length that I am really trying to keep at the forefront of my mind. My top job choice at the moment is one that people generally only keep for a couple years, so even though I could be making a lot of money with that job I might take a lower-paying one right after or stop working for a few years. If we let our lifestyle creep with the first job we could be in real trouble when I move on.
[…] creep” – One of the main objectives of this blog is to hold us accountable in fighting lifestyle creep as our income increases and life situation changes over the next few […]
[…] founding of this blog. I always thought that our post-PhD lives would offer an opportunity for lifestyle inflation, but instead I’m grateful that we live sufficiently below our means to absorb an income cut. […]
[…] had combatting lifestyle inflation on my mind since the very start of this blog, and with Kyle’s new job and higher income it’s finally time to put our money where our mouth […]
[…] of the big purposes of me creating this blog, right from the beginning, was to keep Kyle and I from succumbing to lifestyle inflation as we transitioned out of grad school and into our careers. I knew that many people, upon […]