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Don’t Let Lifestyle Creep Ruin You Future. 7 Key Ways to Avoid It

On Growing up Poor

My husband and I both grew up poor.

We always had food to eat and clothes on our back but the extras were few and far between. A monthly trip to McDonalds was a huge event. Clothes and toys were hand-me-downs from friends and family.

For nearly 2 years, my family hiked two miles to the grocery store to buy food because there just wasn’t money to replace the car that died.

My husband’s family moved from New England to Florida chasing work, an attempt that ended in frustration and a return move back home less than a year later.

Our parents were so busy trying to keep body and soul together that the concept of a budget was completely foreign to them.

Growing up poor, living in survival mode, isn’t the best primer for learning to be financially responsible. You learn to live paycheck-to-paycheck but the notion of having enough money to save or invest is totally foreign.

Living Paycheck-to-Paycheck

During our first few years of marriage, my husband and I lived paycheck-to-paycheck. A trip back East to visit my in-laws required yearlong sacrifice and tight budgeting to afford.

We were both still driving the cars from our college years. When we were finally able to afford a “new” car, complete with monthly payments, it felt like we’d starting moving on up in the world.

Getting Comfortable

Entering the second decade of our marriage, we both had more than ten years dedicated to our jobs. We waited to have children until our careers were established and our finances much more flush.

We were by no means rich, but comfortable is a great term to describe our lifestyle. Even when I left my old career to start my own business, we did well because we made sure we would be able to survive off one income before we made the leap.

With children and our flourishing careers came a busier lifestyle. In our comfortable lifestyle, we started spending on impulse, a purchase from Amazon here and a dinner out for the whole family (and I mean all of them) on us there.

We were both equally guilty. If we wanted something, we bought it. If we wanted to take an extra long weekend and take the kids on a spur of the moment vacation, we did it.

By the grace of our natural personalities and the lean lessons of our childhood, these habits did not lead us to financial ruin. Although, the potential, if left unchecked, was certainly there.

Financially, we were comfortable and we were living in the moment, not looking toward the future.

Hello Lifestyle Creep

Over the years, lifestyle creep had slipped into our lives. And it was threatening our future.

Also know as lifestyle inflation, lifestyle creep sneaks up on you and prevents you from building an emergency fund or properly saving for retirement. It certainly snuck up on us.

If left unchecked, lifestyle creep can lead to mountains of debt and an insecure future, especially retirement.

You fritter away thousands of dollars on momentary pleasures, living in the present without planning for the future.

Lifestyle creep can happen at any income level. It doesn’t matter if it’s a spontaneous dinner out once a week or an impromptu weekend trip. Lifestyle creep is defined by living in the moment, lack of planning for the future and impulsive spending.

We were firmly on the path to deepening lifestyle creep when a heavy dose of reality struck.

Welcome to the Real World

My in-laws have a tumultuous financial history including job loss, home foreclosures, and bankruptcy. They are both high school graduates who worked at blue collar jobs their entire lives.

Over the years, through sheer hard work, New England grit, and strict frugality, they’d managed to improve their fortunes. They bought a home and hung on to it. They started saving for retirement. They had plans for their future which included retiring and traveling the country in an RV.

Then my father-in-law began showing signs of dementia. He could no longer work.

Those last few years of saving furiously for their planned retirement got upended. Lots of new medical bills came calling. And now my mother-in-law has to keep postponing her retirement. Their plans for traveling the country were ended by health and money circumstances.

Because their jobs didn’t provide retirement plans and they started their retirement planning rather late in life, there was no cushion in their plans that would still allow them to even dream of a new alternate plan for their retirement.

All this made me incredibly sad for their circumstances and also led me to reflect on our future.

Facing the Future

Our kids are just starting school. We don’t plan on making any big changes in our lives for the next dozen or so years, but where do we want our next chapter in our life to lead us? Or what if something unforeseen happens like the loss of a job or an unexpected financial crisis?

As my mind was spinning with the idea of creating a budget (I am really good at saving but budgets and I just don’t get along. I balance my checkbook in my head, literally. Such a bad habit!), I realized that one of the main causes of our lifestyle creep was a lack of goals for the future.

Sure, we wanted to retire…eventually. We wanted to travel…at some point. But all these ideas were so far down the road and nebulous that we never actually planned them out and figured out just how we’d make them happen.

I learned that the biggest key to avoiding lifestyles creep is to…

1. Define and Write Down Your Goals

Goals may be more immediate like establishing an emergency fund. Or they may be more long term like retiring at 65 and traveling the world.

But without clear, defined goals, it’s hard to find a reason to keep your spending in check.

I’m a natural saver. I love to squirrel money away in my bank account and watch it grow. But when that money doesn’t have a really clear purpose, it just seems pointless to save. I got very comfortable (there’s that word again) with our lifestyle and our spending habits. Until reality said that plan sucked.

My husband and I sat down and hashed out our goals for the next dozen years while our kids are in school. We also laid out our plans for the empty nest years and our goals for retirement and what we want to do during those years.

Once we had our goals clearly in mind, we were able to tackle creating a strategy to achieve those goals and defeat lifestyle creep.

Our first step was to…

2. Create and follow a budget

You read inspiring stories about how people managed to pay off tens of thousands of dollars of debt in less than a year while making some ridiculously low wage. Every single one of these people was following a budget.

They may not have created an intricate spreadsheet like my husband did where they track every expense, but they followed a strict money regime.

If you want to defeat lifestyle creep and take control of your future, you need to take control of your budget and practice financial self-discipline.

To create a system that sticks, be sure to…

3. Make Gradual Changes

My husband and I didn’t sit down one day and draft a budget then jump to following it the very next day.

We tracked our expenses for 60 days to get a handle on where our money was going and in what areas lifestyle creep had really crept in.

Then we formulated a budget and started following it. Every 60 days we revisit the old spreadsheet and reevaluate where we are and make any adjustments.

Be disciplined but don’t forget to…

4. Reward Yourself

No, you don’t have to go on a “no spending” financial fast. You’ve worked hard to make your money and you deserve to reward yourself. But you do need to make a major effort to start spending your money thoughtfully and intentionally.

If there’s something you want, write it down. Wait 30 days. If you still want it after a month, buy it. This helps cut down on impulse spending.

Shop quality over quantity. Sometimes you pay a bit more up front but if you buy quality products backed by great guarantees, it ultimately saves you money.

We are big fans of brands like L.L. Bean who guarantee their products for life. I’ve had the same pair of snow boots for 12 years. They cost twice the price of similar boots that might have lasted 3 years max. And last year, some of the stitching on the heel of one boot came loose. The company fixed it for free, shipping included. Now they’re as good as new. Quality over quantity.

Spend your money thoughtfully and intentionally and…

5. Avoid Buying on Credit

During my childhood, I had no idea what credit cards were. We didn’t have enough income to qualify for credit. My mother also shied away from acquiring debt after a childhood littered with visits from debt collectors and constantly moving to stay ahead of the bills.

Credit cards and lines of credit still make me very uncomfortable. My husband and I used credit cards cautiously to build our credit early in our marriage. But there have definitely times when we used our cards to finance vacations that we couldn’t afford with cash.

It is too, too easy to live on borrowed money. Money which has to be repaid later and with interest.

Debt and credit cards have their place but they should be used with great caution and not for impulse purchases.

Be cautious with credit but never forget to live a little and…

6. Create a Fun Fund

The Fun Fund has a long history in our household dating back to our paycheck-to-paycheck days.

We married a bit late and are both very independent people. We granted each other a set monthly “Fun Fund” or allowance to spend however we wanted, with no justifications and no questions asked. Any other luxuries beyond this amount had to be a joint decision.

With lifestyle creep, this practice fell out of favor and we were both spending indiscriminately whenever we wanted to.

When we launched our current budget, we reinstated the Fun Fund. Having a bit of cash to spend each month makes it much easier to withstand other budgetary belt tightening.

When it’s time to start taking control of your money, above all…

7. Surround Yourself with Support

Because we have historically been generous with our friends and family, they’ve often seen us as the “successful” ones. When we offered to pay for dinner, they didn’t demure. If they needed a bit of financial help, we were always the first to offer.

Now that we’re more disciplined with our money, we tend to invite family and friends over for a home cooked meal rather than splurge on a night out for everyone. And our friends and family don’t seem to mind. They just want to spend time with us and the kids.

Be open with your friends and family about your change in lifestyle and ask for their support. If a friend happens to propose a spendy outing, be prepared to counter with a less expensive option or ask for a rain check for a thriftier option.

The Future Is Looking Bright

My husband and I well on our way to paying off student loans and our mortgage before our kids graduate from high school. They’ll each be able to start college with a fund to help pay for school. And with flush emergency saving and growing retirement funds, our future is looking brighter and brighter.

So, don’t you let your future slip away for a few momentary pleasures or impulse purchases.

Set goals, create and follow a budget, and stop lifestyle creep in its tracks so that you can enjoy the future you dream about.

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