How to Deal With Lifestyle Inflation [+18 Hacks]


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A lifestyle of excess is not just unhealthy for your bank account; it can also be bad for your mental and physical health. And the higher you climb on the social ladder, the more difficult it becomes to step back down.

Knowing how to deal with lifestyle inflation is important. You can combat lifestyle inflation by making smart choices such as cutting back on your regular expenses, saving up for future goals, and giving yourself small treats that don’t break the bank.

But if you’re feeling like life has become “a little too extravagant” you may have lifestyle creep. There’s no need to worry. It’s never too late to get back on track. Here are some tips on how to adjust your spending habits so that you can live a simpler life without feeling deprived.

What is Lifestyle Inflation?

Lifestyle inflation is the phenomenon that occurs when someone’s income increases, and they automatically increase their spending in line with it. Additionally, this can also happen when someone’s income decreases, but they continue living as if their income was still higher.

Lifestyle inflation is not unique to people who earn more money. Many middle-class workers suffer from lifestyle inflation without even being aware of it. It can also be referred to as keeping up with the Joneses. A symptom of lifestyle inflation is that a person will generally feel like they need more money. 

what is lifestyle inflation

The unfortunate truth about lifestyle Inflation is that the longer you live with a certain income, the less satisfied you become with what your actual needs are in life. When we have a salary increase, it’s easy to fall into the trap of spending that money on wants instead of needs. That is how lifestyle inflation starts and continues.

What Causes Lifestyle Inflation?

The root cause of lifestyle inflation is when we get used to having more money than what our lifestyle requires. Individuals may earn more income now due to several factors. They may have a major salary increase, or they may just be earning more money because they’ve been promoted at work.

Lifestyle inflation happens when that extra income causes lifestyle spending to rise in proportion to wages. If you think will canceling a credit card stop recurring payments the answer is no.

Some other lifestyle inflation causes include:

  • Spending beyond our means. We can easily become accustomed to having certain things and services available to us regularly, even if we don’t need them. Examples are cable TV packages that cost hundreds of dollars each month for hundreds of channels we never watch.
  • Another example is cell phones with features and benefits which cost almost as much as a laptop computer. Additionally, there are deals such as cell phone financing no credit check promotions that lure people in.
  • The most common lifestyle inflation cause is credit card debt which allows people to buy non-essential items without actually taking that money out of their savings account.

Instead of lifestyle inflation, we should live within our means. For example, instead of having cable TV with hundreds of channels of nothing but reality TV and soap operas, maybe you could invest in alternatives to cable TV such as an antenna to get free over-the-air television with 50 or 60 channels that are primarily news and sports-related.

Only purchase cell phone plans which meet your needs without all the extra bells and whistles. Keep a budget for yourself so you aren’t tempted to spend more than what you need or can afford.

How to Prevent Lifestyle Inflation

It is possible to avoid lifestyle inflation. Prevention is the key for how to deal with lifestyle inflation. You can even do it while increasing your standard of living. Here are some simple things you can start doing today to combat lifestyle inflation:

how can you prevent lifestyle inflation
You can prevent lifestyle inflation by focusing on needs, paying off debt, and budgeting

1. Stay Aware of Your Spending Habits 

One way to prevent lifestyle inflation is awareness. Once you are aware that something is happening, then you have the power to stop it from continuing on its path and derail it if necessary. Follow your personal budgetary guidelines when managing finances. Awareness allows us to beat this problem in its tracks before it becomes a raging fire out of control. 

2. Focus On Needs, Not Wants

There’s nothing wrong with having nice things, but think about what those things need to be for them to be beneficial to you. Practice a frugal living lifestyle. If the only reason you want something is because everyone else has it, then it’s probably a want and not a need. 

3. Take Time Off From Spending

A great way to combat lifestyle inflation is by taking time off from spending. Make sure that every month you have 30 days where your only focus is on getting everything done that needs to be completed without the distraction of looking for new toys or buying things.

Read up on saving money or investing which is more important during your break.

By taking time off from spending while working hard at accomplishing your goals, you will not feel like you are missing out on anything when you don’t spend any money because there will be nothing to miss. You’ll also feel more satisfied with your life overall because you will know that what’s important is being taken care of right now. 

4. Pay Off Debt and Live Below Your Means

Paying off debt is a great way to avoid lifestyle inflation as well. If you have zero payments due on any sort of loan or credit card, you will not only feel better about your finances. However, you won’t be tempted to spend money that would otherwise be used for responsible purposes (like paying down debt). There are many benefits of living below your means including deterring lifestyle inflation. This living lifestyle is another effective way to combat lifestyle inflation because it forces you to be more creative with how you spend the money that does come in. 

5. Cut Down on Spending Even Further

If none of the above ideas seem applicable to your current situation, then maybe it’s time for some stronger measures. One of the best ways to stop lifestyle inflation in its tracks is to simply cut down your spending even further. Avoid buy now pay later no credit check instant approval no money down as most of the time, there are hidden fees associated. The more you can live without unnecessary purchases, the more satisfied with a simple lifestyle you will be. 

6. Find New Hobbies That Have Low Spending High Enjoyment

The truth is that lifestyle inflation is like any other form of consumerism. It doesn’t solve the problem of our dissatisfaction and longing for fulfillment because we cannot buy what we want. If you’re not careful, lifestyle inflation can happen so subtly that after a while you won’t know when it started or stopped happening. All you’ll know is that suddenly life seems like a rat race where there’s always something missing but never enough money to fill the void. Then you will start saying I don’t want to work anymore to pay bills.

Finding new hobbies is the perfect way to combat lifestyle inflation. The benefits are many:

  • New hobbies can be fulfilling and provide a much-needed break from all of the stress that accompanies financial obligations.
  • Hobbies don’t cost money but still allow you to enjoy yourself.
  • Some hobbies lead to extra income such as selling feet pics for money.

7. Spend Money Only On Experiences

When lifestyle inflation sets in, people tend to try and buy happiness. When you have lifestyle inflation you must remember to buy experiences over things because not only are experiences usually cheaper than objects but they last longer too.

Experiences can be anything from:

  • something relaxing like going on vacation
  • taking a weekend getaway with your partner
  • or something active like trying out a new sport

The point is, if you spend money making the lives of others better or enjoying yourself, then lifestyle inflation won’t even occur because you will be happy with what you already have. 

8. Focus On Being Present In Every Moment

If lifestyle inflation persists despite the above tactics, it may be time for some introspection into why lifestyle inflation has taken such a hold on your lifestyle. The best way to do this is to focus on being present in every moment with yourself or others so that lifestyle inflation doesn’t take over your life anymore.

You may feel like lifestyle inflation is something that’s out of your control because you’re tempted to spend money and buy things. However, the truth is it’s not an automatic mechanism for society to push upon us. Lifestyle inflation only happens if we let it happen. There were unusual things I stopped buying to save money in my life which allowed me to be present. If we can learn how to live within our means and pay down debt that’s a great first step towards lifestyle stability and happiness overall.

9. Automate Saved Money

It’s a great idea to set up and automate your finances so that money you’ve saved goes directly into an account that can only be accessed if it’s for a specific purpose, like investing or paying down debt. You have the freedom to spend money responsibly and get lifestyle inflation under control again.

10. Practice Paycheck Budgeting

You can also get lifestyle inflation under control by using paycheck budgeting. When lifestyle inflation strikes, you must keep a strict record of your spending so that you can see where the problems with overspending are and how to solve them. This is imperative because lifestyle inflation is a lifestyle choice that we make, something that isn’t in our control all of the time. When you budget by paycheck you can save money and have lifestyle stability over time because it teaches us discipline about how to spend money wisely.

11. Use Debit Cards For Purchases Instead Of Credit Cards

When lifestyle inflation has taken hold of your life, it’s easy for things like credit cards or store charge accounts to be used as a means for satisfying lifestyle inflation. Just watch out for overdraft fees.

The truth is, lifestyle inflation can be triggered by spending habits and credit cards are a quick way to allow lifestyle inflation to take control of your life.

12. Slow Down the Process

There are indeed products out on the market that allow you to buy things before you have the money in hand. The best buy progressive leasing program is such an example. This means lifestyle inflation can occur almost instantly when these extras are purchased or whenever someone wants something extra badly enough they’ll let lifestyle inflation claim them for itself and feel like it doesn’t matter if they don’t have the money for whatever it is they’re contemplating buying right away. It’s always a good idea to slow down lifestyle inflation by considering lifestyle anti-inflation tactics and taking time to figure out whether or not what you’re going to buy is worth the cost.

13. Look for Good Deals

One of the lifestyle anti-inflation tips that can be used right away if lifestyle inflation has taken over, is to look for good deals in your local area where you live. You may find that there are certain stores you visit because they sell things at lower prices than other stores around town do. While this isn’t a lifestyle anti-inflation tip itself, it’s simply a lifestyle choice we make to save money on expensive products and services in our lives. Saving money whenever possible allows us more opportunities in lifestyle choices that we can make whenever lifestyle inflation takes hold and tries to take control of us.

14. Avoid Products With Hidden Costs

A lifestyle anti-inflation tip like this one is something you may not have even considered, but lifestyle inflation is a choice we all make. Whether or not we realize it, lifestyle inflation tends to be triggered by the desire for specific products over others that are similar in price.

Lifestyle inflation isn’t something that happens automatically, it’s just a lifestyle choice we choose to make. It happens whenever we feel like purchasing something extra or more expensive than comparable products on the market. Whenever lifestyle inflation strikes and you’re considering getting things with hidden costs, always ask yourself if these extras (like warranties or larger packages) are worth the extra lifestyle inflation.

Additionally, know how to find finance charge with average daily balance if you are financing it.

15. Look For Store Sales And Coupons

Another lifestyle anti-inflation tip that can be implemented right away is to take a look at store sales in your town and make sure you aren’t shopping for things just because it’s on sale. It may appear that lifestyle inflation is taking control of you, what with all the lifestyle choices you’re making to purchase things you really don’t need (such as expensive clothing or electronics).

Being smart about where you buy your products from can save money over time and allow lifestyle stability; this is something we all deserve isn’t it? For example, there are ways how to save money on high end appliances; up to 50% in some cases.

Lifestyle inflation typically occurs when we shop only at the largest stores in our town or at the ones with the best lifestyle inflation deals without ever thinking about lifestyle anti-inflation tips like this one.

16. Consider Your Income Level And Lifestyle Goals When Making Purchases

When lifestyle inflation hits, we typically make lifestyle choices that have us spending more money than usual. This is always a lifestyle choice we make on purpose. Even if sometimes it might seem as though it’s a lifestyle choice made by an outside force (like lifestyle inflation!) instead of something we can control for ourselves. If lifestyle inflation has taken hold and you’re suddenly looking to spend more money than you’ve ever spent before, consider your income level and your lifestyle goals when making purchases to help avoid overdraft fees.

17. Research Product Reviews Before You Make Your Purchases

Another lifestyle anti-inflation tip like this one should be used right away if lifestyle inflation has you feeling the need to spend money on expensive products and services today. This lifestyle anti-inflation tip will save you time, worry and your hard earned cash by giving you all the information you need to make a wise lifestyle purchase decision that won’t cost you in lifestyle inflation.

18. If You’re Shopping Online, Always Avoid Impulse Purchases

One of the best lifestyle anti-inflation tips you can implement immediately is to avoid impulse purchases when shopping online! Many people who shop online find it difficult to resist making an impulse purchase. This is because there are many online shopping stores that accept pay with eChecks offering convenience. Additionally, they don’t have anyone standing over their shoulder at the time of their shopping experience telling them no or asking them what they need all these products for.

how to avoid lifestyle creep

FAQs

Does anyone benefit from lifestyle inflation?

Banks and credit card companies benefit from lifestyle inflation because people who are buying lifestyle inflation products and services will need to borrow money from a bank or credit card company to pay for items.

What lifestyle choices are primarily responsible for lifestyle inflation?

Choices like buying more expensive cars, eating out an additional amount of times a week, and making irresponsible fiscal decisions.

Are there any lifestyle choices that can help prevent lifestyle inflation?

There are always many ways to avoid lifestyle inflation, but the best way is to avoid impulse purchases and buy only what you need when you need it (avoiding extended warranties or more expensive products). You can also practice living stingy as well.

When do people most often experience lifestyle inflation?

Lifestyle inflation usually occurs at all stages of adulthood because we all feel like we deserve certain things in life. If anything, younger generations are likely to experience quicker rates of lifestyle inflation than their parents’ generation would if they were living the same lifestyles as we are today.

Conclusion

It’s important to know how to deal with lifestyle inflation. Lifestyle inflation is a term that describes when someone’s lifestyle becomes more extravagant than before, usually without any thought or consideration. The person experiencing this type of inflation will often buy things they don’t need and spend money on items they can’t afford. Sometimes they justify this binge spending all in the name of living life to the fullest. If you start to experience debit card declined transactions, you may have a problem.

When you experience lifestyle inflation, it might be time for some lifestyle anti-inflation tips mentioned above. If your financial situation has begun to spiral out of control, there are many ways to get back into good shape financially so that you avoid ending up with debt collectors at your door or an eviction notice taped to your front door. Anyone can get back on the right track financially.

BG Vance

For over 20 years, BG Vance has been a leader in public and personal financial management. He's developed and managed public budgets in excess of hundreds of millions of dollars. He is passionate about the FIRE movement and was featured in the Detroit News in 2001 about saving for retirement. Through the years, he's assisted families and individuals with getting their finances on track. He holds an MPA, is a licensed Realtor, and is currently working on a book about personal finance.

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