Have you ever caught yourself daydreaming about all of the amazing lifestyle changes that await you just beyond your next pay raise? Have you ever fantasized about how to spend a work bonus, only to have the money instantly disappear into your monthly spending? If this sounds familiar, you might be prone to lifestyle creep.
Lifestyle creep—also known as lifestyle inflation—is the tendency to increase your spending as your income increases. Lifestyle creep can be financially dangerous when it happens so gradually that you don’t even notice where your extra funds are going. Goods and services that once were considered luxuries slowly slide into your routine spending. Lifestyle creep can easily sabotage your long-term savings goals and make it harder for you to adjust to any future decreases in your pay.
The good news is that protecting yourself from lifestyle creep is not that hard to do, once you spot it. We’ve rounded up five different ways you can counter lifestyle creep by using your money and your mind.
#1: Write Down Your Goals
This step is so simple you might be tempted to skip it—but don’t. Studies show that describing your goals in written form makes you 1.2 to 1.4 times more likely to successfully accomplish them.
Get a pencil and paper, and make a list of your biggest financial goals. Are you looking to launch a business? Retire early? Start a family? The more detail you can provide, the better. Keep the list somewhere you will see it often so that your financial priorities are top of mind. That way, the next time you get an increase in income, you’ll know exactly what to fund with it.
#2: Pay Yourself First
Paying yourself first simply means putting a portion of your earnings towards your savings goals before any money hits your regular budget. For added motivation, rename your savings account to match one of the goals on your list (see #1, above). It feels more satisfying to fund a specific goal or vision than it does to sock money away into a generically titled “savings account.”
#3: Build a Budget
Creating and maintaining a budget is an essential part of your financial well-being. You can use any budgeting method that works for you (apps, spreadsheets, notebooks or envelopes), as long as you’re able to reliably capture and record your monthly spending.
#4: Stop Comparing Yourself to Others
It’s hard not to compare ourselves to our friends and family—especially in the age of social media. We all have access to an endless feed of our friends’ vacations, new purchases and lifestyle upgrades. The social media feed can quickly become a form of indirect peer pressure, encouraging us to spend our money in ways that we wouldn’t otherwise.
Remember, your budget is your road map to fulfilling your financial goals. Don’t get let others distract you from your vision or rob you of the contentment of being happy with what you have now.
#5: Get Creative with Your Upgrades
You know your goals, you’ve got your budget and you’ve paid yourself first. Now it’s OK to treat yourself a little bit! Keep in mind that the most meaningful lifestyle upgrades for you might not be the ones with the highest dollar value. Lifestyle upgrades can come in all shapes and sizes: a new pillow, a longer charging cable for your phone, supplies for a new hobby… Let yourself enjoy the simpler and less expensive upgrades so that you will become less dependent on the costly ones.
Noble Credit Union, a Forbes Best-in- State Credit Union, has been treating each member with kindness, dignity, and honor while helping members make sound financial decisions for 80 years. The Credit Union offers members full access to a wide range of financial education and services, including low-rate auto loans, MyRewards Visa credit card, mortgage and equity loans, online and mobile banking, and more. For more information about membership at Noble Credit Union,