Lifestyle creep

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AerialWombat
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Lifestyle creep

Post by AerialWombat » Wed Apr 24, 2019 4:40 pm

I just ran some numbers, and year to date my annualized lifestyle cost is up over 20% from last year. I’m on pace to spend $33,000 this year, up from $27,000 last year.

A couple thousand of it was a personal vacation I just took (I usually have 90%+ deductible business travel, this was not).

I save a very high percentage of my net income, but despite this, the lifestyle creep really annoys be. I have a tendency to over-correct in reaction to such things.

Part of me wants to give myself permission to indulge in my success, but the “poor person” in my brain revolts at the thought.

Do you intentionally self-limit your lifestyle creep?

For any other frugal-minded super-savers, how do you evaluate “excessive” correction?
“Life doesn’t come with a warranty.” -Michael LeBoeuf

radiowave
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Re: Lifestyle creep

Post by radiowave » Wed Apr 24, 2019 4:44 pm

I wouldn't consider a couple vacations or trips lifestyle creep. Maybe some lumpy discretionary expenses. If your baseline annual expenses increased that much, yes, agree it needs to be addressed.
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UpperNwGuy
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Re: Lifestyle creep

Post by UpperNwGuy » Wed Apr 24, 2019 4:45 pm

Lifestyle creep is evil. Fight it with every weapon in your arsenal. Don't give in.

I take vacations, but they're in the budget, and the cost of the vacations doesn't increase from year to year.

delamer
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Re: Lifestyle creep

Post by delamer » Wed Apr 24, 2019 4:47 pm

If you are saving according to the goals you’ve set, then why not spend what’s left according to your personal preferences?

sailaway
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Re: Lifestyle creep

Post by sailaway » Wed Apr 24, 2019 4:56 pm

I mark it down to mental health. It was how I justified going out funds when I was single, it is how we justified changing our lifestyle last year. This requires re-evaluation to confirm the increased mental health/ joy in order to justify continuing the expense.

It also helps to set goals that are more concrete than "save all the money!" Although we increased spending last year, we still met our overall savings goal, the percentage was just a smidge lower than previous years. We are on track to have that percentage return to normal for this year, though.

The important thing is that you do no increase your lifestyle just because you have more money coming in. That is, it should be considered and confident, which is the opposite of creep.

smitcat
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Re: Lifestyle creep

Post by smitcat » Wed Apr 24, 2019 5:03 pm

delamer wrote:
Wed Apr 24, 2019 4:47 pm
If you are saving according to the goals you’ve set, then why not spend what’s left according to your personal preferences?
Exactly - money has no value expect to spend it.
Spend some now and save some now - other extremes cannot compete with a balanced life.

drawpoker
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Re: Lifestyle creep

Post by drawpoker » Wed Apr 24, 2019 5:05 pm

AerialWombat wrote:
Wed Apr 24, 2019 4:40 pm
.... ran some numbers, and year to date my annualized lifestyle cost is up over 20% from last year. I’m on pace to spend $33,000 this year, up from $27,000 last year......
Okay, you can account for $2,000 of it. The vacation. You are projecting expenditures to be $6,000 up from last year. This isn't rocket science, you should be able to pinpoint where the other $4,000 is going.

If you are buying expensive, gourmet food, dining out often, buying new furnishings or accessories for the house, visiting the casinos frequently, buying costly gifts for relatives, whatever it is, if it bothers you, just cut it out. Or cut back.
Problem solved.

IF, OTOH, your expenses are going up for the reasons most people are familiar with - insurance, cable, ISP, and utility rates going up, along with local property taxes, gasoline - really jumping up with that - prescription drugs, etc, etc., then it gets one's attention in a hurry. Disciplined people know that is smart to reduce their spending on discretionary items.

It ain't rocket science. Really.

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AerialWombat
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Re: Lifestyle creep

Post by AerialWombat » Wed Apr 24, 2019 5:20 pm

delamer wrote:
Wed Apr 24, 2019 4:47 pm
If you are saving according to the goals you’ve set, then why not spend what’s left according to your personal preferences?
I totally agree with you. But I also have a pointless desire to hit the next even incremental savings rate mark.
“Life doesn’t come with a warranty.” -Michael LeBoeuf

Username1
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Re: Lifestyle creep

Post by Username1 » Wed Apr 24, 2019 5:43 pm

drawpoker wrote:
Wed Apr 24, 2019 5:05 pm

If you are buying expensive, gourmet food, dining out often, buying new furnishings or accessories for the house, visiting the casinos frequently, buying costly gifts for relatives, whatever it is, if it bothers you, just cut it out. Or cut back.
Problem solved.

IF, OTOH, your expenses are going up for the reasons most people are familiar with - insurance, cable, ISP, and utility rates going up, along with local property taxes, gasoline - really jumping up with that - prescription drugs, etc, etc., then it gets one's attention in a hurry. Disciplined people know that is smart to reduce their spending on discretionary items.

It ain't rocket science. Really.
So... my want for business class flights to Europe from the US is lifestyle creep. Economy works as well but I just dislike it. Also, given that it's a vacation trip and not for work, I should stick to economy...

... Man, I love being indulged on business class. I also love that it's one of the few times where there's social classes nowadays. You get to feel really special :'-(

But, yeah, paying 3x more is not worth it :) Or, in other words, economy at 1/3rd the price is very much worth it! :D

Thanks for reminding me about lifestyle creep and discretionary spendings :)

Broken Man 1999
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Re: Lifestyle creep

Post by Broken Man 1999 » Wed Apr 24, 2019 5:48 pm

OP, are you working, or retired?

If working, what % of your income is saved/invested?
With increased spending up to $33,000 this year, will you endanger saving for a comfortable retirement?

If retired, what % of withdrawal is represented by your spending of $33,000?

I can't see if you have anything to worry about unless you (1) You won't be funding your retirement enough, or (2) You are withdrawing an unsustainable amount from your retirement portfolio.

At any rate, if you aren't starving your retirement savings investments, or overspending your retirement portfolio, I certainly wouldn't think the lifestyle creep is necessarily bad.

As a result of the current bull market, DW and I have the ability, and have increased our spending, mainly on home projects. Once done, our spending will return to a lower percentage, but still be well below the 3%-4%.

Me, I don't want to be the richest man in the graveyard. Balance in all things works for me.

Good luck!

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven than I shall not go. " -Mark Twain

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TheTimeLord
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Re: Lifestyle creep

Post by TheTimeLord » Wed Apr 24, 2019 5:48 pm

AerialWombat wrote:
Wed Apr 24, 2019 4:40 pm
I just ran some numbers, and year to date my annualized lifestyle cost is up over 20% from last year. I’m on pace to spend $33,000 this year, up from $27,000 last year.

A couple thousand of it was a personal vacation I just took (I usually have 90%+ deductible business travel, this was not).

I save a very high percentage of my net income, but despite this, the lifestyle creep really annoys be. I have a tendency to over-correct in reaction to such things.

Part of me wants to give myself permission to indulge in my success, but the “poor person” in my brain revolts at the thought.

Do you intentionally self-limit your lifestyle creep?

For any other frugal-minded super-savers, how do you evaluate “excessive” correction?
Money is a means to and end. As long as you LBYM and the things you buy have value to you I think you are doing good. Recently I have been working on giving myself permission to indulge a little more and letting go on some of my spouse's expenditures. If having money makes you a miserable person what is the point?
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

Cycle
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Re: Lifestyle creep

Post by Cycle » Wed Apr 24, 2019 5:50 pm

We know the big levers:
  • student loan debt
  • private education / daycare
  • housing
  • transportation
  • health
Focus on the big levers and the little stuff doesn't matter. If you are low income, eating out and utilities could be a big lever too.

I'm always blown away that many of my coworkers live in 700k+ houses, whilest I paid 95k for mine. Living below your means is how you build wealth.
Never look back unless you are planning to go that way

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AerialWombat
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Re: Lifestyle creep

Post by AerialWombat » Wed Apr 24, 2019 5:58 pm

Broken Man 1999 wrote:
Wed Apr 24, 2019 5:48 pm
OP, are you working, or retired?
Still working. Semi-retiring in a year, age early 40’s. Savings rate is extremely high, but I want higher. The extra $6k is mathematically immaterial. It’s purely a psychological matter.
“Life doesn’t come with a warranty.” -Michael LeBoeuf

ponyboy
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Re: Lifestyle creep

Post by ponyboy » Wed Apr 24, 2019 6:01 pm

Sometimes I wonder why people work? They work so they dont have to work? It cant be healthy to constantly think about saving money. What is the point of all of this? Once you retire, you're not going to spend it anyway. Do things in moderation. If you're saving a lot of money, who cares if you spend a little more each year. It makes almost zero difference.

Thegame14
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Re: Lifestyle creep

Post by Thegame14 » Wed Apr 24, 2019 6:06 pm

Id have ot make more money to have lifestyle creep, company had best year in its 90 year history and my bonus was 2%, and raise 0%, but at least last yera I got a 1% bonus and a 0% raise..... but I was promised 5% bonus in year 1 and 10% in year 2...... not working out to well so far...

Cycle
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Re: Lifestyle creep

Post by Cycle » Wed Apr 24, 2019 6:10 pm

I'm always fascinated with other houses and neighborhoods. I'm always browsing redfin.

One way I am able to stay put in our low cost duplex is by running the numbers on these attractive redfin properties. Seeing it would cost an extra 10-20k for the new property is enough to sober me up and stay put.

Whenever we are considering going somewhere, I think about the cost to travel by personal vehicle. If the place is 20 miles away, I know that's $20 round trip in transportation costs. This keeps us mostly going to places we can bike or walk to. Mostly we just want to go grab a happy hour beer and sit on a patio, and it would be silly to spend $20 traveling somewhere to spend $10 on beer.
Never look back unless you are planning to go that way

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GerryL
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Re: Lifestyle creep

Post by GerryL » Wed Apr 24, 2019 6:15 pm

I used to say that my mother was the only person who could make a trend out of one data point. "We used to eat there," she would say after we'd been to a restaurant one time. A one year increase is a blip. A data point. It doesn't become creep until it keeps repeating.

In retirement I am loosening the purse strings, so frugal me is a little concerned that I will go overboard. Here is how I keep track: Since I record all my expenses in Quicken, several times a year I look at my total YTD expenses and divide that number by the number of the month that just ended, e.g., divide the total by 3 at the beginning of April. I then multiply the results by 12 to get a rough estimate of whether I am likely to over or under spend for the year. I try to frontload big expenses when I can. This technique helps me know that I am keeping within bounds, with time to adjust excess spending.

Luckywon
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Re: Lifestyle creep

Post by Luckywon » Wed Apr 24, 2019 6:15 pm

OP, will you continue to be so averse to spending money in your very early retirement and if so how do you envision spending your time? I hope I am not coming across as being judgmental or challenging you, I'm really interested in your answers.

DonIce
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Re: Lifestyle creep

Post by DonIce » Wed Apr 24, 2019 6:20 pm

I separate my expenses into three basic categories:
Housing
Experiences/Travel
Everything Else

My "everything else" budget I viciously keep locked down and prevent it from increasing. It's the same today as it was when I was a college student. Hasn't even increased with inflation.

Housing has gone up a lot, as I went from renting a tiny studio while in grad school to owning a house in a VHCOL area now. I'm not particularly put off by this, that's just what it costs to live where I want to live and have the amount of space that I need (its 900 sq ft), can't really argue with it.

Experiences/travel I leave as essentially unbounded. What's the point of foregoing experiences/travel now so that you can instead spend the money on those experiences/travel later, in retirement, when you're old and sore and have less energy? My tastes in this area naturally help to keep the costs down... most of my trips are to go hiking, skiing, and climbing, not to stay at expensive resorts or whatever.

bhsince87
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Re: Lifestyle creep

Post by bhsince87 » Wed Apr 24, 2019 8:29 pm

Enjoy it!

"Lifestyle creep" is one of the key drivers of the capitalist economy.

There's nothing wrong with wanting to make your life more enjoyable.

Moderation is the key. But THAT is a murky subject....
"If ye love wealth better than liberty, the tranquility of servitude better than the animating contest of freedom, go home from us in peace." Samuel Adams

marcopolo
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Re: Lifestyle creep

Post by marcopolo » Wed Apr 24, 2019 8:44 pm

AerialWombat wrote:
Wed Apr 24, 2019 4:40 pm
I just ran some numbers, and year to date my annualized lifestyle cost is up over 20% from last year. I’m on pace to spend $33,000 this year, up from $27,000 last year.

A couple thousand of it was a personal vacation I just took (I usually have 90%+ deductible business travel, this was not).

I save a very high percentage of my net income, but despite this, the lifestyle creep really annoys be. I have a tendency to over-correct in reaction to such things.

Part of me wants to give myself permission to indulge in my success, but the “poor person” in my brain revolts at the thought.

Do you intentionally self-limit your lifestyle creep?

For any other frugal-minded super-savers, how do you evaluate “excessive” correction?
Maybe cut back on the daily Red Bull and junk snacks? :D

But seriously, you mentioned in another thread that you have savings rate of over 80%. Your expenses are quite low, you are not talking about going from $150k to $200k. I think you can safely give yourself permission to enjoy yourself a little bit. Financial independence is a nice goal, but IMHO one should also enjoy the journey on the way.
Once in a while you get shown the light, in the strangest of places if you look at it right.

Starfish
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Re: Lifestyle creep

Post by Starfish » Wed Apr 24, 2019 8:50 pm

Because I value more time now as opposed to future time I impose myself some lifestyle creep.
Is things I value. For example I force myself to travel more. Not in fancier hotels, just more quantity and longer flights (new places). I buy myself nice things for activities I like (new skis for example). For me a personal vacation would be a plus not a minus, a reason to be happy.

Colorado13
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Re: Lifestyle creep

Post by Colorado13 » Wed Apr 24, 2019 8:58 pm

OP, I am in a similar situation and could have written your post. My rationale for spending more than usual on vacation was 1. I can afford it, 2. I meet/exceed all of my other investing goals and 3. The future is not promised to anyone, so I want to travel now when I'm able to in case something unforeseen happens and I can't travel in the future. I don't want to regret not having traveled.

You are buying experiences, not "stuff", which should lead to more happiness (according to the behavioral economics experts.) Since you are still achieving your investing targets, you probably don't need much of a correction, right? I understand your angst, we super savers also need to learn to spend now and not just save for the future. We all have to make choices, some choose lifestyle creep and buy fancy cars, others travel, etc. As you said, the $6K is immaterial. You don't sound like you will increase your spending by 20% each year, so you'll be fine...

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Re: Lifestyle creep

Post by willthrill81 » Wed Apr 24, 2019 8:59 pm

radiowave wrote:
Wed Apr 24, 2019 4:44 pm
I wouldn't consider a couple vacations or trips lifestyle creep. Maybe some lumpy discretionary expenses. If your baseline annual expenses increased that much, yes, agree it needs to be addressed.
I agree. Lifestyle creep is difficult to assess when comparing one year to the next. It's a longer trend, IMHO.

For instance, eight years ago, my wife and I spent $8k touring Ireland for a month ( :D ). In 2018, we spent about $2k on all vacations for the year. This year, we'll spend about $5k. Some spending categories like that are just highly variable from one year to the next.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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fortfun
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Re: Lifestyle creep

Post by fortfun » Wed Apr 24, 2019 9:03 pm

AerialWombat wrote:
Wed Apr 24, 2019 4:40 pm
I just ran some numbers, and year to date my annualized lifestyle cost is up over 20% from last year. I’m on pace to spend $33,000 this year, up from $27,000 last year.

A couple thousand of it was a personal vacation I just took (I usually have 90%+ deductible business travel, this was not).

I save a very high percentage of my net income, but despite this, the lifestyle creep really annoys be. I have a tendency to over-correct in reaction to such things.

Part of me wants to give myself permission to indulge in my success, but the “poor person” in my brain revolts at the thought.

Do you intentionally self-limit your lifestyle creep?

For any other frugal-minded super-savers, how do you evaluate “excessive” correction?
DW and I max out 401k, 403b, and both 457s. That helps prevent the creep you describe. We make up for it with CC bonuses. If you are saving at the rate you want, creep away :) We just blew a ton of money on a summer trip for the family but it should be worth it. I put it on 4 new credit cards, so those bonus miles will pay for next summer's flights, hopefully to South Africa.

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Sandtrap
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Re: Lifestyle creep

Post by Sandtrap » Wed Apr 24, 2019 9:10 pm

Lifestyle creep?

Recent Hawaii trip: $8k
upcoming:
New shop building: $50-80k
New detached garage: 120k+
Restucco and paint home: 30k+
New Courtyard walls and pavers and landscaping: 80k+
etc
etc

I think of these more as high end "honey do's"

Some things just have to be done. Not sure if they are "lifestyle creep". :oops:
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Watty
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Re: Lifestyle creep

Post by Watty » Wed Apr 24, 2019 9:52 pm

UpperNwGuy wrote:
Wed Apr 24, 2019 4:45 pm
Lifestyle creep is evil. Fight it with every weapon in your arsenal. Don't give in.
Lifestyle creep has always been my goal. :beer

It is all about balance.

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Doom&Gloom
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Re: Lifestyle creep

Post by Doom&Gloom » Wed Apr 24, 2019 9:56 pm

Watty wrote:
Wed Apr 24, 2019 9:52 pm
UpperNwGuy wrote:
Wed Apr 24, 2019 4:45 pm
Lifestyle creep is evil. Fight it with every weapon in your arsenal. Don't give in.
Lifestyle creep has always been my goal. :beer

It is all about balance.
+1

momvesting
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Re: Lifestyle creep

Post by momvesting » Wed Apr 24, 2019 10:36 pm

You need to take a hard look at your expenses and figure out exactly where the creep is and whether or not it is good for you. Some lifestyle creep that I will happily embrace includes buying more good foods, like organic brands, fresh and frozen instead of canned veggies, good lean cuts of meat, and overall anything that when examined by itself is worth the price for its affect on our health. Some other good thing would be buying better quality products (for example cars or appliances) that may cost more upfront but will cost less over their lifespan because they last longer or are more efficient. The third kind is when you trade time for money. For example, if you hire out things like painting and lawn work. You have to honestly assess if you would rather spend the money or spend the time on these things.

Then there is the plain, old wasteful creep. This includes things like paying late fees because you didn't pay bills on time. IMHO, these are the things that should always be avoided. Then there is the stuff in between. You just have to analyze the source of the lifestyle creep and see if you can live with it.

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NotYourAverageJones
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Re: Lifestyle creep

Post by NotYourAverageJones » Thu Apr 25, 2019 5:21 am

***Below was my response to another similar post the other day regarding "spending and expenses while saving for retirement." It also applies to our position on what you are calling "Lifestyle Creep."
Here's the thing: We decided early on after watching our own parents work so.damn.hard to only strictly save for "retirement" that the best way for us to have a "happy life balance" is to also spend some along the way and enjoy life as we go, when we are younger. Our only goal isn’t to just save for some arbitrary retirement date in the future. Life is uncertain. $#@! happens. Unexpected and potentially financially destructive things happen to push the goal line further away (death, LT support of aging family, sickness, even divorce). So we built ourselves a solid IP and faithfully follow it. BUT, we also spend money on stuff that makes us feel like we aren't just working to save or living to just work. This thing called life is also meant to be enjoyed and we won't find enjoyment just stressing the saving part at the expense of enjoying the journey. But again, to each their own! :wink:
Seems rational for us, but this mentality may make others feel out of control in doing it this way. My thought: "FI isn't a one-size fits all approach." You have to sleep at night and if spending a few extra thousand dollars on a vacation makes you stress out, then dial it back this next year a bit and call it good. Think of it like putting yourself on a financial diet. When you are on vacation, just eat the dang desserts and enjoy each bite of them. But when you get home, substitute a few meals with salads! This approach is called "Lifestyle Balance." And honestly, by your reaction to the uptick in "vacation spending" it was probably money you really NEEDED to spend for your own sanity. Cut yourself some slack and move on. :wink:
Last edited by NotYourAverageJones on Tue Apr 30, 2019 7:17 am, edited 1 time in total.

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SailorManDan
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Re: Lifestyle creep

Post by SailorManDan » Thu Apr 25, 2019 5:59 am

I view this a little different and not in the creepy sort of way (pun intended). The real question is at what age will you achieve FI? Since you have income I'll assume your still working. The more luxuries you give your today's (working) person the longer you delay your future (retired) person. It's not just about being retired either but rather having the opportunity to retire (or work less), if desired. I'll also assume your young and single and that is the best time to experience the compound interest phenomenon. By socking away as much money as you can in your 20's and 30's you'll have a much greater opportunity to achieve FI at a much earlier age. All that said, you do need to live life fully each and every day as there may not be a tomorrow. Some people live a full life without a car using a bicycle or public transit to get places. Other people the minimum is a BMW 7 series.

Full disclosure: I fully retired 5 years ago at age of 44, sold all possessions and now live full-time on a boat in the Caribbean. Yes, dreams can come true.

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Tamarind
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Re: Lifestyle creep

Post by Tamarind » Thu Apr 25, 2019 6:24 am

I think it is best for people to examine their financial situation and come up with a budget with a set savings percentage that will meet their goals. Pay the savings first, then necessary expenses. Then spend the rest in a manner that brings you joy.

Saving "as much as possible" allows for a lot of over- or under-saving, depending on the individual's personality.

If you are saving your goal amount, and the "creep" is a result of taking budget surplus from expenses that didn't happen to spend on something fun, lay off yourself.

If you undersaved as a result of your vacation splurge, take a look at your budget and make a more concrete plan for next time.

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JoeRetire
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Re: Lifestyle creep

Post by JoeRetire » Thu Apr 25, 2019 6:26 am

AerialWombat wrote:
Wed Apr 24, 2019 4:40 pm
Do you intentionally self-limit your lifestyle creep?

For any other frugal-minded super-savers, how do you evaluate “excessive” correction?
We have lived so as to enjoy each stage of our lives. It's normal that spending changes as your life changes. You get to decide how much spending is too much (and hence "lifestyle creep") and how much is not too much.

There's no magic here. If spending more now means you can't achieve your goals later, then don't do it. If you can still accomplish your goals while spending more on something that is meaningful for you now, then do it.

Don't be bound by a simplistic "I must never spend more than I did last year" mentality. Just be smart about it. Use common sense rather than a magic formula.
Very Stable Genius

stevekozak2
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Re: Lifestyle creep

Post by stevekozak2 » Thu Apr 25, 2019 7:15 am

NotYourAverageJones wrote:
Thu Apr 25, 2019 5:21 am
***Below was my response to another similar post the other day regarding "spending and expenses while saving for retirement." It also applies to our position on what you are calling "Lifestyle Creep."
Here's the thing: We decided early on after watching our own parents work so.damn.hard to only strictly save for "retirement" that the best way for us to have a "happy life balance" is to also spend some along the way and enjoy life as we go, when we are younger. Our only goal isn’t to just save for some arbitrary retirement date in the future. Life is uncertain. $#@! happens. Unexpected and potentially financially destructive things happen to push the goal line further away (death, LT support of aging family, sickness, even divorce). So we built ourselves a solid IP and faithfully follow it. BUT, we also spend money on stuff that makes us feel like we aren't just working to save or living to just work. This thing called life is also meant to be enjoyed and we won't find enjoyment just stressing the saving part at the expense of enjoying the journey. But again, to each their own! :wink:
Seems rational for us, but this mentality may make others feel out of control in doing it this way. My thought: "FI isn't a one-size fits all approach." You have to sleep at night and if spending a few extra thousand dollars on a vacation makes you stress out, then dial it back this next year a bit and call it good. Think of it like putting yourself on a financial diet. When you are on vacation, just eat the dang deserts and enjoy each bite of them. But when you get home, substitute a few meals with salads! This approach is called "Lifestyle Balance." And honestly, by your reaction to the uptick in "vacation spending" it was probably money you really NEEDED to spend for your own sanity. Cut yourself some slack and move on. :wink:
This is my approach as well. I am very disciplined in my day to day life. When I go on vacation, I give myself permission to indulge. I don't go out of my way to spend money, but I also don't pick places to eat based on prices of food, and don't limit my experiences by price. When I want to see something that costs money, and when I get there it is more than imagined, I don't turn away. My brain says "that is too much for this". I then tell my brain, "yep, but I want to see it, so it is not TOO much." I have a budget for vacation and I stay within it, but I don't make a conscious decision to try to come back from vacation with any of the money to save.

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Re: Lifestyle creep

Post by Sandtrap » Thu Apr 25, 2019 7:24 am

Watty wrote:
Wed Apr 24, 2019 9:52 pm
UpperNwGuy wrote:
Wed Apr 24, 2019 4:45 pm
Lifestyle creep is evil. Fight it with every weapon in your arsenal. Don't give in.
Lifestyle creep has always been my goal. :beer

It is all about balance.
Yes.
All things in moderation. . . . including moderation. :happy

Actionably: if one budgets for these things as part of a portfolio, then all is well.
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Nowizard
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Re: Lifestyle creep

Post by Nowizard » Thu Apr 25, 2019 7:30 am

Sounds like savings creep since most people would increase their lifestyle as they became more successful unless they had a very focused view of success and personal satisfaction. If additional savings is your goal, and you are satisfied with other aspects of your life, then go for it. If there are other areas of life you feel are being hindered by an overly focused financial goal, question it. As with reviewing our financial plans, it helps to review our overall life plan and the role finances plays in it.

Tim

MnD
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Re: Lifestyle creep

Post by MnD » Thu Apr 25, 2019 7:39 am

While in accumulation mode we had a firm savings goal made 100% automatically and we spent the rest on whatever we pleased.
In retirement we have a firm spending goal all deposited automatically and we allow ourselves to spend it however we like.
Life is too short to be worrying about lifestyle creep or feeling guilty about some past expense.
You have the ability to plan, so balance living and enjoying the present consistent with taking care of your future self.
70/30 AA, Global market cap equity. Rebalance if FI <25% or >35%. Weighted ER< .10%. 5% of annual portfolio balance SWR, Proportional (to AA) withdrawals.

shell921
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Re: Lifestyle creep

Post by shell921 » Thu Apr 25, 2019 7:40 am

JoeRetire wrote:
Thu Apr 25, 2019 6:26 am
AerialWombat wrote:
Wed Apr 24, 2019 4:40 pm
Do you intentionally self-limit your lifestyle creep?

For any other frugal-minded super-savers, how do you evaluate “excessive” correction?
We have lived so as to enjoy each stage of our lives. It's normal that spending changes as your life changes. You get to decide how much spending is too much (and hence "lifestyle creep") and how much is not too much.

There's no magic here. If spending more now means you can't achieve your goals later, then don't do it. If you can still accomplish your goals while spending more on something that is meaningful for you now, then do it.

Don't be bound by a simplistic "I must never spend more than I did last year" mentality. Just be smart about it. Use common sense rather than a magic formula.
:thumbsup

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NotYourAverageJones
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Re: Lifestyle creep

Post by NotYourAverageJones » Thu Apr 25, 2019 8:18 am

shell921 wrote:
Thu Apr 25, 2019 7:40 am
JoeRetire wrote:
Thu Apr 25, 2019 6:26 am
AerialWombat wrote:
Wed Apr 24, 2019 4:40 pm
Do you intentionally self-limit your lifestyle creep?

For any other frugal-minded super-savers, how do you evaluate “excessive” correction?
We have lived so as to enjoy each stage of our lives. It's normal that spending changes as your life changes. You get to decide how much spending is too much (and hence "lifestyle creep") and how much is not too much.

There's no magic here. If spending more now means you can't achieve your goals later, then don't do it. If you can still accomplish your goals while spending more on something that is meaningful for you now, then do it.

Don't be bound by a simplistic "I must never spend more than I did last year" mentality. Just be smart about it. Use common sense rather than a magic formula.
:thumbsup
:thumbsup :thumbsup with a twist!

ohai
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Re: Lifestyle creep

Post by ohai » Thu Apr 25, 2019 8:55 am

There's nothing wrong with spending more if you have more money. Of course, you should keep track of your dollar spending to make sure you're still hitting reasonable targets.

pdavi21
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Re: Lifestyle creep

Post by pdavi21 » Thu Apr 25, 2019 9:35 am

You need more data because spending can have a lot of variance. I filter out vacations to track my base expenses (although I add them into total), just because my total expenses are about 12k, and my vacations are over 1k each. It ruins the data. After a few years, you will get the picture. If you think you have lifestyle creep, buy less stuff, and buy cheaper stuff. It really is that simple.
"We spend a great deal of time studying history, which, let's face it, is mostly the history of stupidity." -Stephen Hawking

AllenSmith
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Re: Lifestyle creep

Post by AllenSmith » Thu Apr 25, 2019 9:55 am

AerialWombat wrote:
Wed Apr 24, 2019 5:58 pm
Broken Man 1999 wrote:
Wed Apr 24, 2019 5:48 pm
OP, are you working, or retired?
Still working. Semi-retiring in a year, age early 40’s. Savings rate is extremely high, but I want higher. The extra $6k is mathematically immaterial. It’s purely a psychological matter.
if its so immaterial, i would just forget about it. you're wasting brain cells

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mrspock
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Re: Lifestyle creep

Post by mrspock » Thu Apr 25, 2019 11:35 am

AerialWombat wrote:
Wed Apr 24, 2019 4:40 pm
I just ran some numbers, and year to date my annualized lifestyle cost is up over 20% from last year. I’m on pace to spend $33,000 this year, up from $27,000 last year.

A couple thousand of it was a personal vacation I just took (I usually have 90%+ deductible business travel, this was not).

I save a very high percentage of my net income, but despite this, the lifestyle creep really annoys be. I have a tendency to over-correct in reaction to such things.

Part of me wants to give myself permission to indulge in my success, but the “poor person” in my brain revolts at the thought.

Do you intentionally self-limit your lifestyle creep?

For any other frugal-minded super-savers, how do you evaluate “excessive” correction?
The way I handle lifestyle creep is to be intentional about it. If I’m going to raise my expenses by X for say more doodads, fancy vacations, nicer car, biz class travel etc. I then figure out how that changes my retirement target nest egg amount, and how many more months/years I have to work to account for it. Then I decide if it’s worth it, spoiler.... usually the answer is no.

I also categorize things into discretionary and not. If it’s the latter and I could cut back in the event of a drop in equities, I’ll give myself a bit more leeway (say for faster Internet). However, big ticket items like: cars, houses, I don’t consider them discretionary as folks have egos and get used to them... so for that I will strictly recalculate my target retirement date.

My plan right now is delay all non-discretionary lifestyle creep till I hit my number, I’ll then consider it I want to work longer and reward those years with some lifestyle creep (within the means of my now, larger nest egg).

Not sure if this all makes sense, but it’s how I think about it.

SRenaeP
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Re: Lifestyle creep

Post by SRenaeP » Thu Apr 25, 2019 1:54 pm

Tamarind wrote:
Thu Apr 25, 2019 6:24 am
I think it is best for people to examine their financial situation and come up with a budget with a set savings percentage that will meet their goals. Pay the savings first, then necessary expenses. Then spend the rest in a manner that brings you joy.

Saving "as much as possible" allows for a lot of over- or under-saving, depending on the individual's personality.

If you are saving your goal amount, and the "creep" is a result of taking budget surplus from expenses that didn't happen to spend on something fun, lay off yourself.

If you undersaved as a result of your vacation splurge, take a look at your budget and make a more concrete plan for next time.
Here here! :sharebeer

I use a similar approach. I also steer clear of things that will increase my fixed expenses. I have no problem with 'creep' that's pay as you go with no lasting impact. Discretionary expenses are just that and can be dialed up or down at will.

Dottie57
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Re: Lifestyle creep

Post by Dottie57 » Thu Apr 25, 2019 3:01 pm

Set savings goals. If they are met, the rest is spending money. People do die young, enjoy your life too.

delamer
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Re: Lifestyle creep

Post by delamer » Thu Apr 25, 2019 3:05 pm

SRenaeP wrote:
Thu Apr 25, 2019 1:54 pm
Tamarind wrote:
Thu Apr 25, 2019 6:24 am
I think it is best for people to examine their financial situation and come up with a budget with a set savings percentage that will meet their goals. Pay the savings first, then necessary expenses. Then spend the rest in a manner that brings you joy.

Saving "as much as possible" allows for a lot of over- or under-saving, depending on the individual's personality.

If you are saving your goal amount, and the "creep" is a result of taking budget surplus from expenses that didn't happen to spend on something fun, lay off yourself.

If you undersaved as a result of your vacation splurge, take a look at your budget and make a more concrete plan for next time.
Here here! :sharebeer

I use a similar approach. I also steer clear of things that will increase my fixed expenses. I have no problem with 'creep' that's pay as you go with no lasting impact. Discretionary expenses are just that and can be dialed up or down at will.
I’ve seen this with ourselves and friends/neighbors as we’ve come closer to (or reached FI). Nobody bought a bigger house or a vacation condo. They took more expense vacations or bought nicer cars. Nothing that would require permanent or long-term additions to their budget.

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Re: Lifestyle creep

Post by AerialWombat » Thu Apr 25, 2019 3:34 pm

Dottie57 wrote:
Thu Apr 25, 2019 3:01 pm
Set savings goals. If they are met, the rest is spending money. People do die young, enjoy your life too.
I'm already grossly exceeding any rational savings goals. To me, it's kind of a game. There's a little part of my brain, somewhere back in the corner, that's twitching and screaming, "You should aim for a 95% savings rate, mwahahaha!".

That's what I meant about the psychological component, rather than it being a necessity issue.
“Life doesn’t come with a warranty.” -Michael LeBoeuf

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StormShadow
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Re: Lifestyle creep

Post by StormShadow » Thu Apr 25, 2019 3:36 pm

AerialWombat wrote:
Wed Apr 24, 2019 4:40 pm
Do you intentionally self-limit your lifestyle creep?
Nope. You can't take it with you.

Dottie57
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Re: Lifestyle creep

Post by Dottie57 » Thu Apr 25, 2019 3:42 pm

AerialWombat wrote:
Thu Apr 25, 2019 3:34 pm
Dottie57 wrote:
Thu Apr 25, 2019 3:01 pm
Set savings goals. If they are met, the rest is spending money. People do die young, enjoy your life too.
I'm already grossly exceeding any rational savings goals. To me, it's kind of a game. There's a little part of my brain, somewhere back in the corner, that's twitching and screaming, "You should aim for a 95% savings rate, mwahahaha!".

That's what I meant about the psychological component, rather than it being a necessity issue.
Ok - I understand - kind of. :happy

Maybe stop looking at your balances so much. Put more focus on your life activities and that of others. You really won’t win a prize at the end of your life if you die with a pile of money.
Last edited by Dottie57 on Thu Apr 25, 2019 3:44 pm, edited 1 time in total.

MathWizard
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Re: Lifestyle creep

Post by MathWizard » Thu Apr 25, 2019 3:42 pm

$33K/yr. does not strike me as an extravagant lifestyle.

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