Avoiding Lifestyle Creep

Now that I have turned 40, I look around and I have noticed some friends that have, and more friends that have not, avoided lifestyle creep.

What the term refers to is the natural tendency to increase your spending and upgrade your lifestyle as you advance in career and salary.

It is a very natural thing to do, and not necessarily a bad thing in all cases.

Certainly, I would not want to live at age 40 the way that I did when I was in my early 20s.

Don't get me wrong, my early 20s were a blast.  I lived in a college town in upstate New York.  I lived less than a block from the epicenter of the weekend social scene - prime real estate for college kids and recent grads.

But the peanut butter and jelly, ramen noodle, and beer diet could only last so long.  The same is true for a young person's tendency to live paycheck to paycheck - or really scrimp when the money ran out before payday.

Landing my first professional job meant that I could move out of a house shared with other guys into the wonderful solitude of a one bedroom flat above a restaurant.  And I bought the Jeep Wrangler that I had long coveted.

Fast forward a few years, and the single guy apartment gave way to a house, wife, kids, and pets. The Jeep turned into a pickup truck and expenses rose as my salary tried almost in vain to keep the pace. Not a formula for successful saving.  No chance to benefit from years of compound growth.

What I have learned, and what I am now re-dedicating myself to, is avoiding any further lifestyle creep.

Specifically, as a result of continuing education and the nature of my union salary guide, I will be in line for a raise come September.  While I have to focus on paying down the loans that helped to cover the costs of another graduate degree, I am committing myself to directing at least half of the "new money" in my paychecks to savings by having the money automatically transferred from my bank account to my brokerage account.

I am not very worried about saving everything that I possibly can.  It just isn't realistic for me.  Nor do I want to deprive myself or my family of certain pleasures and experiences.

I'll still hit the occasional happy hour with friends.  We can still have pizza on Fridays - we live in New Jersey, so it's more or less the law.  We'll still go on some day and weekend trips here and there.

I am not the kind of person that is interested in extreme couponing or cutting my own hair.  God knows what a disaster that would be.  There isn't necessarily anything wrong with that - and I definitely admire those of you out there who are able to save 30, 40, 50, 60 or more percent of your income.  It's amazing and at times, sure, I wish I could do it.  But for most people, myself included, I don't think the cleanliness of theory when it comes to that sort savings meshes well with the reality of modern family life.  But that's just one opinion.

My aim is to focus on spending my dollars more carefully without feeling deprived - and saving the rest.

What I do not want to fall into is the lifestyle trap.

I would love to buy a new car, but I don't need one.  When I do, a Honda Accord will do just fine, although I'd like to drive an Audi.

I don't need a blowout vacation to Disney, followed up by a cruise six months later.  We're great hitting up a national park for some camping, and a few day trips down the shore this summer.

I definitely don't need new tech toys, huge TVs in every room, and all manner of electronic gadgets.
I'd rather go for a run, or better yet, an hour or two on the bike with my little man towed behind in the trailer.

Recognizing the tendency to spend what's in your pocket is the first step.  Creating a realistic savings plan is the second step.  Now, it's up to me - and to all of us - to execute the plan and lay the foundations for future security and success.

Good luck!  And please feel free to comment below as to your success stories battling lifestyle creep, or email me at dividism@gmail.com.


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