Lifestyle Inflation Sucks
Lifestyle Inflation is what happens when unnecessary spending balloons to match a growing salary. Essentially, you start to spend more in everyday life without ever realising!
Do you remember the days of being a student? If they were anything like mine, loan day was a good one… A couple of heavy nights out would follow and a big food shop. Regardless of your situation – whether you had a job or not – I’m willing to bet that you lived off a lot let money back then than you do now. While you might argue that ‘real-life’ comes with more financial responsibilities, take a few minutes to consider areas of your life that have become more lavish for less justified reasons….
Food
Probably an area we are all guilty of increasing our spending in relative proportion to our income. In student days, staple foods were adequate. Rice, beans, bread, mincemeat etc. sufficed. As we transition from student life into a graduate life, food is the first area that begins to inflate. For some it inflates only slightly (I count myself in this genre) – we buy better quality meat and perhaps organic vegetables; or at least fresh instead of frozen! For others, food spending gets freaking massive… like totally off-the-chain. I see so many of my friends Facebook pictures in fancy restaurants and know that half of them don’t think twice about spending £5 on a sandwich for lunch… their salaries allow them to do this though right?
What’s more, this only gets worse with time. Someone who once spend about a pound on dinner is thinking nothing of spending tens if not hundreds of times that on just one meal sitting…. it still ends up in the same place people!
Drink
OK so when you were a student you probably drunk a lot more than you do now… or at least most of us did! Would logic then not suggest that our spending in this category should go down? NOT if you are going to spend £10 a drink on those fancy cocktails and buy that expensive wine. Just because you have an expensive wardrobe, it doesn’t mean you need to drink fancy Eastern European beers that you can’t pronounce in an overpriced garden all afternoon! As our earnings increase, so do the venues that we attend… what once got you ruined for a week will now only get you tipsy!
Fancy Cars
This is my pet hate!!!! Just because you can get approved for a £30K car loan and buy yourself a nice little sports car, it doesn’t mean that it is the right choice to make! I cringe as I see my 25 year old ex-classmates pose with their little soft-tops…. Is that 5 year car loan really worth an extra few seconds to get to 70? Do you even realise the increased fuel, insurance and servicing costs that come as a consequence… I thought not!
So Mr SavvyScot, What is the Right Thing to Do With a Payrise?
This is SIMPLE….. Save it… pretend that it didn’t exist. It is the only way to stop your lifestyle accidentally becoming inflated (unless you have serious self-discipline). Most people use how much money they have left in their account as a measure of how much to spend. Regardless of how many pay rises you get, this is only going to make you spend more!
With the interest rates at an all-time-low, those of you who are lucky enough to have a mortgage should concentrate on smashing out over payments. Putting your salary towards your mortgage may not make a difference to your pay packet – but it will sure as heck make a difference to your mortgage balance!
Lifestyle inflation does suck. We are working on taming this!
Power to you 😉
I don’t think it sucks, it is normal to want to live a little better than when you were a broke student. Which doesn’t mean spending like crazy on useless stuff. I used to put all my raises toward investments and financial independence, with a small amount for travel or celebrating.
I agree that it’s good to live a little better, but there is a little better then taking that to the EXTREME! I definitely don’t hold back on my indulgent areas (travel, sports and experiences) but try to keep the belt tightened in others! 🙂
I’ve never gotten a raise, new jobs and promotions, but no raises (damn non-profits ;-)). Sometimes I feel like I’m still living like a broke college student because I’m so aggressively trying to save my money. I guess feeling like I was “behind” because of $30k in student debt, made me think that everyone else was saving and getting ahead of me. They weren’t but it’s hard to get out of that mentality.
True that… but by saving money so aggressively, you are effectively living a deflated lifestyle 😀 !
Our income has increased recently and it is tough not to spend it all. Our biggest weakness is good food. We like to buy nicer foods because we both love good cuisine. We are trying to curb this, though.
It is very tough… and my weakness is also good food. We don’t go mad in expensive restaurants, but rather we spend more money on better quality (and more extravagant) ingredients. I just need to be careful not to go overboard!!!