Smart Reasons to Save, Use and Invest Money

Lifestyle Creep Checkup

Well, I decided to give myself a Lifestyle Creep checkup and report back my findings!

Now a lot of you are more familiar with the phrase: Lifestyle Inflation, but I prefer the more precise phrase: “Lifestyle Creep”. The two concepts are slight different and to me the more accurate representation of my experience is Lifestyle Creep. If you are interested in the differences between the two terms, check out my article called “The Difference Between Lifestyle Creep and Lifestyle Inflation“.

Before I go into my lifestyle creep checkup, let me discuss what has enabled lifestyle creep to come into my life in the first place.

At the beginning of 2010, I finally became totally debt-free! By totally debt-free, I mean no credit card debt, no car loans, no home mortgages or any other type of debt! Eliminating all of my debt increased my income stream by so much at I wrote an article about it called: Paying Off Your Mortgage is Like Working at a Second Job! This increased discretionary income stream is the source that has been fueling my slow lifestyle creep advancement. Now onto the checkup!

My Lifestyle Creep Checkup

  1. Increase in more expensive vacations, versus in the past occasionally skipping vacations for certain years. (I’m okay with this, and I totally accept and want this!)
  2. Increased consumption at gourmet coffee shops (This lifestyle creep element has to be stopped or reduced!)
  3. Lack of concern about sudden expenses. My wife got a speeding ticket recently and we just below it off. In the past, we should try to account for the expense (not to mention the increase in our car insurance payments). (complacency is enemy of those trying to become wealthy, this is not acceptable!)
  4. Kids are entered into sports without cost considerations (I’m half and half on this. If the program offers value to my kids, then “lifestyle creep” be damned, if not then I need to cut it out!)
  5. Dinning out, multiple times during the weekend. Sometimes, we go out to eat up to three times in one weekend. (This is horrible! Need to sharpen the Axe)
  6. Both my wife and I go out and spend money with friends on movies, lunch, golf and special trips. (I’m half and half on this too, some lifestyle increase is good since we derive a lot of value out of these experiences)
  7. I didn’t carpool with a friend from work when gas prices went over $3! See this post: Carpooling to Save Money and Reduce Gas Prices! I found that I enjoy my personal time too much to share it anymore. Plus, when I drive to work, I think of blogging ideas. (This is horrible, but I accept it anyway!)

Overall, for this past year, I would give myself a B+” on my Lifestyle Creep Checkup, and here’s why:

  1. I’ve been able to pay my credit card bill in full each month.
  2. I increased my contribution to my 401(k) to near the max that is allowable. I didn’t max it out totally because of the unpredictability of bonuses and other extra monetary rewards.
  3. I’m participating on my employer’s ESPP! Read this article: Getting Over 15% Return By Saving Money In An ESPP for a way to make better money than the typical stock returns, with little to no risk (It’s been all up for me!). I consider this one of the more intelligent moves I’ve made recently!!!
  4. I’ve been able to make a little money by blogging. This is a win-win scenario for me because I get money for doing something that I really enjoy!!!

Lifestyle Creep Checkup Conclusion

Yes, I have some lifestyle creep in my life, but I’m still saving over 25% of my income and investing it. I’m also living a more balanced life and really enjoying my vacations without worrying about how I’m going to be able to afford them!

I will have to cut out some fat in my lifestyle if I want to remain debt-free, but I don’t think it will be that difficult to accomplish.

Hope you enjoyed my lifestyle creep checkup. How are you going, are you experiencing any such phenomena?




15 Responses to Lifestyle Creep Checkup

  1. You are doing great MR. You have worked hard to pay off ALL debt. If your kids want to play soccer, then that is great. As you said, you pay off your credit card in full each month.

    Do you have a goal for retirement or something big? In your situation, I would enjoy life and be a responsible spender. However, if my spending started detracted from my overall goals, then I would start to worry. Regarding the speeding ticket, what else can you do? I guess you can drive slower to prevent a ticket in the future, but you can’t get that money back. Not many people have a ‘driving infraction’ fund, unless they are a really bad driver I suppose.

    I think you are doing great!

    • Kris, you are right! I need to try to balance out my lifestyle, and spend money on things that are important to me or my family!

      lol, I love the “drive infraction” fund :). When I was single, I would just make the money up by cutting back in other areas. It would take me about a month or two to recap my lose, but eventually it would even out and I would go back to normal.

  2. First of all, congrats on being debt free. Second, as long as you are making and meeting savings goals, then that should be a decent way to keep the creep under control. Periodic check-ups sound like a good way to go.

  3. My approach is making savings (retirement) a priority and keeping my expenses inline. Life is more than just sacrifice. Why not indulge occasionally?

  4. I think you did a great job with the debt and deserve a little lifestyle creep. As long as you keep it from inflating much more, you should be fine right? You are still saving quite a bit more than the average American.

    • True, very true… I think I feel bad because I want to become wealthy, and I think that it will require even dime…

      Still, I’m not going to go skiing when I’m 80…

  5. A little indulging is fine, and it sounds you’re making some serious memories. In the end, it’s the 25% saved that counts. That’s an enviable figure for most people, even PF bloggers.

    • It’s pretty easy saving 25% when there is no debt involved and your a frugal person by nature (and you wife is too).

      Still, I’m starting to indulge a bit more and it’s getting easier too.

  6. Boo, you actually expect us to behave and pay attention. I’m being sarcastic. I think sometimes we’re way too hard on ourselves; however, that doesn’t mean we shouldn’t do just what you did: an inventory on spending and values to make sure that they are aligned properly.


  7. I think a little creep is healthy, otherwise you may fall into the miserly category. It’s hard not to feel guilty about spending when it’s second nature to save. I just wrote about this last week too.

    You deserve a few indulgences here and there