There’s a reason they call it lifestyle creep. At first, it’s small things like paying for valet instead of circling the parking lot, or choosing a nicer restaurant for your Friday night date. But, before you know it, it’s charging a $6,500 Chanel bag to your Nordstrom card because “I make more money now” and “I have an image to maintain.” (Spoiler alert: This is my personal experience with lifestyle creep.) I wish I’d had these practical tips for avoiding lifestyle creep in my 20s. My finances would be in better shape today, and I’d have avoided a lot of debt-related stress. In this article, I’ll share how I stopped lifestyle creep and got myself back on track financially after being over $10,000 in credit card debt.
What is lifestyle creep?
Lifestyle creep is when your spending increases as your income does.
In some ways, lifestyle creep is natural. After all, isn’t the point of working hard to make more money so you can live a more comfortable life?
But lifestyle creep can also escalate quickly and turn into overspending as it did in my case.
Is lifestyle creep bad?
Lifestyle creep is not necessarily a bad thing. Strategically increasing your spending in specific areas can even make you happier.
For example, you could move to a safer neighborhood or one closer to work because a higher income means you can afford a higher monthly rent. Or you allocate some of your additional income to outsourcing tasks. This might include a meal prep or laundry service.
Making your life easier can enhance your quality of life and free time for more important things, like spending time with your loved ones, pursuing a hobby, or leisure.
However, lifestyle creep can generate stress when your spending increases across all areas of your life or to the point where you go into debt to maintain an image like what happened to me.
My journey with lifestyle creep
My career began in advertising which already put me at risk for going into debt.
In my experience, advertising is a superficial industry that rewards you for your appearance. It is the epitome of “fake it till you make it” through designer labels and brands.
Simply put, the more put together and “expensive” you look, the more successful you look. Some real The Devil Wears Prada shit (at least at the agencies where I worked).
As my career progressed and my salary increased, I began spending more to fuel the illusion of my success.
That included buying nicer clothes more frequently, buying coffee and lunch every day, freely spending money on evenings out, and services like laundry and meal delivery.
Unfortunately, my salary didn’t increase SO MUCH with every promotion that I could justify all these expenses.
I soon went into debt because I couldn’t spend within my means. I had little to no savings and was constantly worried about financial emergencies.
This continued after I left advertising to start freelancing. After all, I had to tell the world that I was a successful business owner somehow!
My lifestyle creep came to a screeching halt after I shut my business down in 2022. I was making no money and we went from a two-income household to living off a single salary.
I had no choice but to come clean and adjust my spending. Here are the practical ways I stopped my lifestyle creep and paid off my credit card debt once and for all.
Tips for avoiding lifestyle creep
Track your expenses every day for an entire month
When I say track your expenses for an entire month, I mean it! Track every single transaction. It might sound tedious, but it’s the only way to know where your money is going.
Your budget tracker doesn’t have to be fancy – it just has to allow you to categorize, filter, and sort your expenses.
You can get away with using a free tool like Google Sheets or Notion. I have used and love both.
Also, don’t overcomplicate it by tracking a million things about each expense like the merchant, date, payment method, etc.
You can get away with just tracking how much you spent and the broad category the expense falls into: rent, utilities, subscriptions, groceries, eating out, coffee, clothes, makeup, etc.
Make this as easy as possible for yourself so you actually do it! Just be consistent in how you label each expense so you can group them later on.
Sort & analyze your expenses
At the end of the month, sort your expenses by category so you can sum up how much you spent in each category.
Then, go category by category and decide if it’s within or outside of your control at this time.
Realistically, there’ll be some expenses that you’re locked into. This might include your rent, a car lease, a year-long subscription, or a monthly student loan payment. These are examples of expenses that you can’t control at this time but can revisit later.
Then there are categories that you can control, like how much you spend on eating out, shopping, subscriptions, or services.
To make this easy on yourself, you’re going work within the categories that you can control at this time.
Identify your priorities
We all have things we care about and are unwilling to let go of. That’s perfectly fine!
The important thing is to identify what those are so you can still be true to your values while adjusting your spending in other, less important areas.
Go through the list of expenses within your control and decide what you’re passionate about.
For me, I’m passionate about skincare and reading so I allocate my disposable income to those categories.
I’m not as passionate about clothing or eating out so I shop less frequently and we eat at home more often.
Some of the best advice I’ve ever received is that if everything is a priority then nothing is a priority. This is true about your spending as well. If you spend freely in every area of your life, then you won’t be able to enjoy life while still meeting your financial goals.
Find realistic alternatives for expenses you want to reduce
Time for some tough truths:
This is the hardest part of this entire process.
When we’re making changes, we tend to be extreme. We decide not to spend any money at all ever again! But extreme behavior is hard to maintain and full-on deprivation sometimes feels like punishment.
The best thing to do is find realistic alternatives for the expenses you want to reduce.
For example, if you want to stop spending money at coffee shops, you should find a way to make coffee at home that meets your standards. This might mean buying a new coffeemaker but that initial expense will pay off in the long run.
Maybe you want to eat out less but hate cooking. Consider pre-made meals or invest in low-effort tools like a slow cooker or an air fryer.
Some people want to spend less money on clothes. To achieve this, they might buy fewer but higher-quality clothes in neutral colors to build a capsule collection.
Unless the situation is dire and calls for a full-on “no buy,” give yourself some grace. You want to build habits that stick and it’s easier to build habits when you feel good.
Turn your low-cost alternatives into rituals
If you really want your low-cost alternatives to become a part of your routine, shift your perspective. Don’t view them as sacrifices, but turn them into rituals.
A ritual is more impactful than a routine because it romanticizes your life and brings inner peace or satisfaction.
This might mean putting on some relaxing music while you make the perfect caramel latte every morning or taking a half-hour to do your nails every weekend while listening to an audiobook.
When you turn a routine into a ritual, you start to look forward to it.
Continue to track your expenses daily
It’s important to hold yourself accountable as you’re adjusting your spending.
Continue to track your expenses every day.
Tally your spending at the end of every week and month to check on your progress.
Celebrate yourself for any positive changes and give yourself grace if you’re not yet meeting your goals.
If you find yourself overspending in a category you were hoping to reduce, reflect on what led to the expenses and brainstorm ways to avoid it in the future.
Reallocate any money that’s freed up
As money is freed up, use it to bring yourself closer to your longer-term financial goals.
This can be savings, investments, or debt repayment – or a combination of the three.
The point is to allocate money toward bigger financial goals like an emergency fund, retirement, or a debt-free life so it doesn’t get spent on another category.
At first, I chose to pay off my credit card debt. Any money that I freed up by avoiding lifestyle creep went toward paying off my credit card balance.
Once I’d paid off my credit card debt, I began focusing on building an emergency fund. Now, I’m starting to think about saving for retirement.
You’ll soon realize that meeting these big-picture financial goals means more than maintaining an image for external validation.
Celebrate your wins
Adjusting your lifestyle is hard work. Especially if your lifestyle is intertwined with how you see yourself.
That’s why it’s important to celebrate every milestone along the way.
Acknowledge how incredible you are for putting your financial well-being first every single time you make a spending decision that’s in line with your goals.
Tell yourself you’re amazing and doing a fantastic job every single time you fill in your expense tracker.
Recognize that you’re courageous enough to make difficult changes for the sake of your future self every single time you review your budget.
Do not let your hard work go unnoticed!
Before you know it, you’ll have your spending under control and it will support your longer-term goals.
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