I’ve been thinking a lot about this lately and trying to be more intentional. As life gets more financially comfortable, I’ve noticed how easy it is for spending to slowly increase without really noticing better groceries, more convenience, more “little upgrades” here and there. It adds up over time. I’m trying to be more mindful about staying disciplined and not just automatically adjusting lifestyle upward every time there’s more flexibility. For people who’ve successfully avoided lifestyle creep, what actually helped you stay grounded long-term? Was it habits, mindset shifts, budgeting systems, or something else?
Context: I’m a 32F stay at home wife with two kids, married to a 42M in medicine. I’m trying to be intentional about not letting our spending expand just because we can afford more.
How do you stay financially disciplined and avoid lifestyle creep as income increases?
byu/LinkCommercial9508 inpersonalfinance
Posted by LinkCommercial9508
9 Comments
“Lifestyle creep” is not necessarily a dirty word.
As your income increases, it’s entirely reasonable that your lifestyle improves. You don’t need to live like a broke college student your entire life.
That said, just make sure your savings and investing also increases the same or more.
I buy bougie groceries compared to when I was a broke student, but I balance it out by rarely eating out.
Just make a budget that carves out “fun spending” and do whatever with it what you want
The best system I have found is to do a monthly financial check in with all my accounts. Savings, credit, brokerage ,mortgage… Everything. It all goes in a spreadsheet and calculates things like net worth, net debt. Liquid money, retirement savings…
So long as everything is trending in the right direction, at a reasonable rate, all is good. If not, I make adjustments as necessary.
A simple method is to target a certain savings rate. For example, let’s say you want to save at least 25% of your income, then increases in income naturally mean you need to save more but also that you can spend more. You can do that without worrying about where the money is to go.
Now, at low incomes you may not be able to save much and at high incomes there is a lot of choice in how much to save, so consider whether the percentage should change.
Investment creep is a much safer mental disorder. How much can you learn?
We basically followed the Money Guy financial order of operations. As our income increased, we focused on maxing out retirement accounts first. Now that those are covered, we’re able to save and invest for future purchases without feeling guilty spending some money along the way. It helped us avoid automatically inflating our lifestyle every time income went up.
Budgeting. Everytime my household gets a pay raise, we put all but 1% into increasing retirement or savings. A little bit of lifestyle creep is fine and enjoyable. But we want to put our future first and so we immediately budget/adjust payroll withholdings so we don’t see most of any raise.
I spend every dollar like I’m about to be homeless
It’s not the best for your mental health, I won’t lie
You don’t – but you can control how much lifestyle creep you experience. Maybe you add 2 nights of takeout a week and a 2-week European vacation. You’ll be fine.
Don’t buy a Porsche 911 every year – you won’t be fine