How To Stop Lifestyle Creep And Keep More Of Your Money

Isn’t it great when you get a raise at work?

Getting more money, to make life easier, to buy the things you’ve wanted, that’s all good isn’t it?

Or is it?

Lifestyle creep is at work every time you get a raise and spend it.

It’s one thing to increase your spending patterns from that of a poor student.

But quite another to continually increase your spending every time you get a raise.


Because if you spend everything you earn you are effectively living paycheck to paycheck and become caught in the lifestyle trap of forever needing more and more money.

What happens if one day you don’t receive your paycheck?

Financial disaster, that’s what.

And if you don’t fight lifestyle creep then you are forever living for today and not planning for tomorrow. (not a good thing)

When I started working and earning my own money I thought I would be rich, contented, happy and have everything I wanted if only I earned $5k more than I did then.

Well guess what? It didn’t quite work out like that.

I got a promotion and pay rises and increased my lifestyle to match my increased income.

As a result I still wanted a bit more, if only I earned (another) $5k more.

It took me too many years to realize that if I kept my lifestyle at the same level, when I did get a pay rise I could save the extra money.

That way I had options to do different things with my money, rather than it being eaten up in the minutia of daily living.

the word money on wooden blocks in grey and black

What Are The Signs Of Lifestyle Creep?

You may be very aware that you are inflating your lifestyle each year but here’s a reminder of some of the signs:

  • You’ve got credit card debt that came from many small purchases
  • You’ve spent your paycheck before you receive it
  • Credit cards come in handy towards the end of the month so you can continue your lifestyle
  • You already have plans for your next raise, before you get it
  • You’ve already spent your tax refund
  • Getting a 10% pay rise would sort all your financial problems out, at least that is what you think
  • You don’t look for deals and vouchers
  • You like to upgrade your wardrobe every year

What Are Lifestyle Expenses

Your lifestyle expenses are all the things you buy to maintain your lifestyle.

These expenses are all those things you buy over and above the basics of home, utility bills and basic living expenses.

Lifestyle expenses can vary enormously from a small amount each month to huge sums of money and can include:

  • Beauty treatments
  • Entertainment
  • New cars
  • Bigger houses
  • More expensive groceries
  • Vacations
  • Hobbies
2 people on a blue scooter with bags to signify lifestyle creep

What Is Lifestyle Creep And Lifestyle Inflation

Lifestyle inflation is another name for lifestyle creep.

Each year, with each pay rise you get, your lifestyle creeps up a bit to take account of your new income.

Like inflation creeps up each year, which is why we always want a decent pay rise to take account of the cost of goods going up.

How Do You Fight Lifestyle Creep?

Knowing that lifestyle creep is real is a big step towards fighting it.

If you acknowledge that it is a thing and you could succumb to it then that’s a giant step towards controlling lifestyle creep and limiting it’s impact on your finances.

Come and follow me on Pinterest for more money saving hints and frugal tips!

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7 Ways You Can Stop Lifestyle Creep From Hurting Your Finances

1. Don’t Inflate Your Expenses

When you get a raise or a windfall don’t work out how you can spend it.

Getting a 5% raise does not mean you should immediately increase your spending by the same amount.

It’s nice to spend a bit more money but by no means is it necessary.

Start living below your means by keeping your expenses and your spending the same and pocket the extra as savings.

2. Be Happy With Enough

Much of the problem of the every increasing lifestyle trap is looking at what others have and thinking you must have the same.

But others could be in thousands of debt to pay for their lifestyle, do you want the same?

When you develop a strong frugal mindset and are happy with your enough, you won’t hanker after more and lifestyle inflation is no longer a concern.

3. Keep To Your Budget

Your budget allows you to live well without going into debt and to make the right savings for your goals.

When you know how to budget your money and you keep to it, you don’t need to worry about spending too much.

When you receive a bonus, windfall or tax refund, it’s outside your budget so don’t spend it.

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man completing paperwork on low table with calculator

4. Know Your Why

Believe it or not, some people are perfectly happy (or say they are) in not having a money plan for their future, believing they will never retire.

NOT something I would want you to think.

If you are going to control your lifestyle creep and make decisions about not spending or cutting back you need to know why you would do so.

You need your bigger picture life goals clear in your head.

Know why you want to control your spending and your money.

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5. Have Goals For Your Money

Your financial goals go hand in hand with your why. Because your goals are based on what is important to you and your future.

When you’ve got clear goals you reduce the temptation to overspend as that overspend would wreck your goals.

6. Pay Your Future Self First

Your future self (that’s you in 30, 40 or even 50 years time) needs you to give thought to how you are going to live when you are much older and retired.

Your retirement savings should be a priority.

Put a chunk of any extra money you have into your retirement savings AND DO NOT TOUCH.

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7. Track Your Spending

If you know how much you are spending each month and on what, you can easily identify the signs of lifestyle creep because your spending will be increasing, even if only slowly.

Track your spending in the easy-to-spend-more categories like:

  • Groceries
  • Entertainment
  • Clothes
  • Beauty treatments
  • Meals and coffee out

If you are worried about how much you spend in any of these categories you could use the cash envelope system for a month or two to really focus down on your spending.

Related post: The Best Cash Envelope Wallet To Help You Love Cash Budgeting

hand on large calculator with 4 small pink piggies in front

How Do You Prevent Lifestyle Creep From Eating Your Wealth?

Knowledge is power. Knowing the signs of lifestyle creep helps you fight it and stop it from eating your wealth.

Sticking to your budget and saving for your future will increase your wealth and keep it safe from careless spending.

Ensure you have all the financial basics covered in your budget:

These basics will help you increase your wealth by allowing you to make long term savings and never getting into bad debt.

couple with shopping bags to signify lifestyle creep

4 Steps You Can Take If You Need To Reverse Lifestyle Inflation

If you’re already in the lifestyle trap of spending everything you earn then there are plenty of things you can do to help with reversing lifestyle inflation and getting your finances in a better place.

1. Revisit Your Budget

Look at your current budget and identify places where you can make savings.

Look at how to cut monthly expenses and focus on some of the lifestyle expenses that have crept in.

For example you could cut back on your entertainment budget and focus on finding cheaper or free things to do instead.

Related post: How To Fix Budgeting Mistakes Right Now – 5 Simple Steps

2. Review Your Bills

Chances are you haven’t reviewed your bills recently so now is a good time to do so.

Negotiate with existing providers or find a cheaper alternative.

Utility bills and insurances are always worth haggling over as there are many providers out there who want your business.

3. Reduce Your Grocery Budget

Food can make up a large proportion of your lifestyle expenses, think restaurant meals, takeaways and nice foods from the more expensive stores.

Get back to basics with your grocery shopping.

For meal planning help you can take advantage of the $5 meal plan. For just $5 a month you get meal plans and shopping lists emailed to you every week.

Different diets catered for and you can use this even if not US based (it took me months to work out this basic tip!)

Given we can waste up to 30% of all the food we buy, $5 a month for recipes and a grocery list emailed to you every week will definitely save you a ton of money over the next few months.

And you can start with a 14 day FREE trial, that way you can get a feel for how it will work for you, without spending any money.

Try $5 Meal Plan Today!

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Readjust Your Money Goals

If your goals have been to have exotic vacations every year and a new car every 3 years then now is the time to give yourself a reality check and readjust them.

It’s not that you can’t have vacations but you might need to lace a bit more reality into their cost.

And if your car is still running fine in 3 years time why spend out on a new one?

glass jar and small hessian sack filled with dollar bill rolls to signify lifestyle creep

Stop Lifestyle Creep Once And For All

When you control your money, you control what you spend and why.

Don’t allow frivolous spending to creep in just because you have a bit more money.

Make that extra money work for you, pay more towards your mortgage or retirement funds or your long term savings.

If you could save an extra $2000 as a result of not falling victim to lifestyle creep, think how much more you would have in 20 or 30 years?

For more help in managing your money have a read of these posts:

How To Manage Your Finances – The Best Ways For 2020

How To Manage Money As A Couple: 9 (Successful) Strategies

pinterest image for lifestyle creep, lifestyle inflation

Last Updated on 5th April 2023 by Emma

About Emma

I'm here to help you become confident in making the best money decisions for you and your family. Frugal living has changed my life, let me help you change yours.

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