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I’ve noticed a trend in my spending lately. It is increasing – frequently.
Most of it is just a bit of laziness on my part. We hit our major financial goal of getting out of consumer debt (we paid off $293,000). Yes, I have other financial goals, but my budget doesn’t need to be as tight as before which means I’m spending a little bit more.
Increased lifestyle creep is never a good trend.
Spending creep happens naturally.
- It happens when you are living on a tight budget and want a break for a few weeks. You just want to be irresponsible for once.
- It happens when you are debt free and start to loosen your budget.
- It really happens to people who aren’t living on a budget.
Wanting to spend money is a natural part of life.
I’ve thought a lot about this issue over the last couple of weeks and noticed what behavioral patterns work best to decrease my spending.
I’ve come up with 5 Tips that I use to control my spending creep and avoid lifestyle inflation
1. Continue to budget
I know, this is kind of a well doh, of course, you have to budget. Budgeting is the best way to control your spending.
However, just because you want to spend more money, doesn’t mean you need to increase your budgetary category spending each month. What it means is that you still need to keep and maintain a realistic budget.
I’ve switched our budget to a percentage based system which by its very nature allows for a bit more creativity. As a result, I’m not tracking my spending as closely.
As long as I stay within my percentages this is fine, but I’m noticing the creep more and more.
I believe that half the battle is being aware of the issue. In the last couple of weeks since I noticed the creep, I’ve been a lot more conscious of my spending and am back to being careful about my budget again.
I was really seeing this issue with my food budget and as a result decided to Makeover my Grocery Budget.
2. Give yourself some wiggle room
Although we always left some fun money in our budget, I’m realizing that as my financial responsibilities have decreased my desire to have fun money has increased.
It was easy for me to sacrifice when I had a firm goal in mind.
Now I want to play just a little bit more.
Is this a bad desire – No!
There is nothing wrong with incorporating extra spending in your budget when the time is right.
The main goal is to set realistic wiggle room. Allow for fun, but don’t go overboard in the name of fun.
I think the biggest key to success in this area is having firm guidelines on your wants versus your needs. When you can keep the two separate and don’t fool yourself into thinking that wants are needs it is easier to control lifestyle creep.
3. Set new personal financial goals
Setting other financial goals is what really motivates me to avoid spending creep. I sat down a few months ago and realized that if we really buckle down we should be able to pay off our home in 3 years on our ten your anniversary.
This is largely dependent on how many hours I work with my part-time job.
Still, knowing that we could hit such a huge milestone on our ten-year anniversary is a huge factor for me.
This one goal has helped stopped my extra spending in my tracks. I just keep thinking how amazing it would be to get rid of our house payment.
Everyone’s goals are different, but if you have a financial goal that speaks to your heart whether it be saving for a trip, paying off debt or retirement, you’ll have a much easier time avoiding the inevitable spending creep.
Meaningful personal financial goals make it easier to sacrifice now, for future results.
4. Take a look at your priorities
This is a big one for me. My real priorities aren’t associated with spending money. My priorities are tied in with creating memories. Yes, sometimes creating memories costs money, but most of my best memories are of spending time with friends and family.
Take a step back and really think about what matters to you. Often our spending is associated with trying to impress other people. It is all about keeping up with the neighbors and having the appearance of wealth.
When we sit back and really review what makes us happy it is much easier to see that spending money isn’t the answer.
5. Review finances quarterly or semi-annually to find your holes
It is always a good idea to regularly review your spending. You need to do it monthly when updating your budget. However, I’ve noticed that often by reviewing my spending over a longer time period I can pick out trends that aren’t immediately obvious on a month-to-month basis.
For example, I’ve noticed that spending through Amazon has increased. Most of it is legitimate stuff, but it wasn’t until I looked at my 3-month average that I realized I was spending more than I should.
It wasn’t major, which is why I didn’t notice it on a month-to-month basis. Since it was Amazon it was hidden away in my grocery, clothing and miscellaneous funds.
It is super easy to overspend when shopping online.
I also do an annual review of my regular monthly bills to find additional spending leaks. You’ll often find that bills like cable, phone, and other regular expenses seem to increase without any notice. You can read about how I do my annual review here: 6 ways to save money on your current bills.
Why Spending Creep Matters
Spending Creep happens to virtually everyone. Everyone is susceptible to a little bit of lifestyle inflation. Seriously – who doesn’t want a few nice things in their life. Fighting lifestyle creep is a critical part of every family budget.
We have this odd belief that stuff makes us happy – probably because stuff does make us happy for a short time.
The problem is that the happy shopping endorphins only last so long. If you are dependent on stuff/shopping to make you happy you’ll always be searching for the next fix.
I wrote a few month ago about the most important key to financial success. I personally believe that financial success comes as a result of contentment. Being happy in the moment is what matters.
Spending money doesn’t give me lasting happiness.
True happiness comes from knowing I can control my spending and reach the financial goals I’ve set for myself.
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