10 Ways to Avoid Lifestyle Inflation

Awhile not all lifestyle inflation is necessarily bad, it certainly can wreak havoc on a budget if you aren't careful. Here's how to prevent lifestyle inflation.You may have heard the term “lifestyle inflation,” but if you haven’t, lifestyle inflation is when you start buying more to support a more lavish lifestyle. This could happen as you get older or as your income increases.

Awhile not all lifestyle inflation is necessarily bad, it certainly can wreak havoc on a budget if you aren’t careful. Another danger of lifestyle inflation is that often time, people’s desired lifestyle costs more than what they make, resulting in credit card debt or other forms of debt.

These certainly aren’t rules, but rather guidelines on how to keep your lifestyle in check. So here are 10 ways to avoid lifestyle inflation.

1. Forget About the Joneses

Keeping up with the Joneses is dangerous to you and to your budget. We all have moments of impulse where we see what our friends and neighbors have an we want it. For me, when I look at my friends, I want to travel more, buy a house, and eat out more. But these are all things that, though I feel confident I can do someday, would bust my budget right now and honestly aren’t my top priority at the moment.

So ignore the Joneses and do what’s best for you. Make your money work for you and trust your gut with timing. You might not be able to afford everything your friends have right now, but you can make it a goal to work for it and save for it for the future.

2. Trust Your Budget

Your budget is in place for a reason. It’s because it works for you.

Many people consider budgets to be confining, but have you ever thought about how much freedom a budget actually allows you?

If you budget properly, you’ll have more money to spend how you want. If you can control “boring,” but necessary expenses, like the electric bill, rent, groceries, and debt, you’ll have more money left over at the end of the month. Then you can actually choose how to spend that money in a way you want.

3. Allow Yourself Limited Inflation

It can be challenging to keep living like a broke college student years after you graduated, and it’s okay to allow yourself a little inflation. But you have to decide what your priorities are.

For me, when I finally broke free of the “broke college grad” stage, I started purchasing much healthier and more wholesome foods, as well as buying a few minor decorations for my apartment. It didn’t cost a ton, but it helps me to keep going with my budget.

If your budget allows, give yourself some sort of small luxury. Maybe you will allow yourself to go to a movie once a month, or a night out with friends every so often, or a gym membership. Whatever it is, make sure it 1) still fits within your budget and 2) is something you truly value.

4. Have a Plan for All Extra Money

When you have extra, unexpected, income, what is your plan for it?

While you can’t expect to get a tax return, inheritance, or birthday money, it doesn’t hurt to commit to putting extra money towards savings or debt.

This also goes for making extra money. I committed to putting any extra money through blogging and freelance writing towards debt. I don’t allow myself to use this money to inflate my lifestyle because honestly, I work HARD for that extra money and I don’t have to do it. I would hate to see my hard work be wasted on frivolous purchases. I am buying my financial freedom with that money.

In addition, any extra money, like gifted money from the wedding, tax returns, or extra paychecks go to our debt. When you get a large chunk of unexpected money, it can be so tempting to spend it, so planning what you will do with that money ahead of time prevents lifestyle inflation.

5. Keep a Running List of Wants and Needs

Keeping a list of wants and needs helps you to prevent impulse purchases.

For example, you might really want to go on a vacation to France. With vigorous savings and planning, that could totally happen. But when your friends try to get you to go on a trip to Hawaii, you’ll have to make a choice between what you want and what your friends want.

And when you keep a list of your needs, you’ll be able to better prioritize your spending. You’ll find yourself often having to pick between wants and needs, which will keep your finances in check.

6. Sell Items Frequently

Look around your house. How much stuff laying around don’t you use?

Take the time to frequently audit your possessions will remind you how much you already had. It will promote a minimalist lifestyle and show you that, frankly, you likely already have everything you truly need.

Plus, selling your items is a nice way to earn a little cash to pad your emergency fund or pay off debt!

7. Decide if Luxuries or Convenience is More Important to You

There are different types of lifestyle inflation. You can buy more luxury items – like furniture, fancier clothes, vacations, or cars, or people tend to splurge more on convenience items, like eating out, time-saving apps, or delivery services. While I don’t allow myself many big “luxury” inflations, I have allowed myself to purchase some convenience items because my time, though it has become more important, is less.

Convenience purchases, to a point, can be a reinvestment back to yourself. I personally would so much rather spend money on something that saves me time or makes me feel better versus buying something luxurious just to have.

My most recent convenience purchase was an upgraded iPhone. As a blogger, I constantly rely on my phone to conduct business, and my old phone ran out of storage and no longer supported my needs. So this was a luxury that was worth the cost to me.

8. Know Your Bare-Bones Budget

While this hopefully isn’t the budget you have to rely on every day, I always keep a bare-bones budget in the back of my mind. This is the budget I would switch to if I ever lost my job or came down with a serious illness or emergency.

It’s important to keep this budget in mind because at some point in your life, you won’t be able to afford luxuries. So how can you keep your lifestyle in check?

Think about someone rich who lives lavishly. They could make a million dollars a year. But if they lost their job tomorrow, could they support their current lifestyle for very long? Probably not.

This is a case for not ever increasing your lifestyle too quickly. While you don’t need to be a cheapskate all the time, it’s important to limit your lifestyle to something you can afford no matter what life throws your way.

9. Advance Your Savings Goals

When you receive a raise or lump sum of income, how do you spend it? Do you automatically consider how you could increase your lifestyle?

I’m challenging you to instead, focus on increasing your savings. There is always a case for saving more money. It doesn’t make much sense to continually fund a more lavish lifestyle while you keep your saving goals the same.

Remember, as you earn more and your lifestyle increases, your savings goals must as well.

10. Remember, Personal Finance is Personal

Everyone has drastically different financial situations, and your money is yours. Don’t let anyone tell you how to spend it!

If you don’t care about buying a house ever, then don’t buy one. If you make $500,000 a year, but choose to invest all of it while not increasing your lifestyle at all, more power to you.

And that goes for me as well. These are all tips for avoiding lifestyle inflation, because I believe we all should live somewhat below our means. But don’t think I’m trying to tell you how to spend your money! Your situation, values, and needs are so different from mine or anyone else’s. So do what’s right for you, but also be mindful about how much you’re spending on creating a lifestyle for yourself. Because having a great life doesn’t need to cost a ton 🙂

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Have you ever been tempted to increase your lifestyle? Any other tips on how to avoid lifestyle inflation? Drop a comment below!

10 Ways to Stop Impulse Shopping

How many people do you know who are fairly decent at budgeting, but then BAM, their closet is spilling over and they can be found at the mall every weekend? I’ll let you in on a secret: that used to be me.

Shopping was such an emotional habit for me. I’d shop when I was bored, when I was lonely, when I was stressed, when I was procrastinating. Shopping made me feel better for a little bit, but it wasn’t solving anything.

The worst part of it was that I was buying a lot of cheap, poor quality clothes. But my closet quickly became filled with, so put it bluntly, a whole lot of crap.

It wasn’t until I moved that I realized just how much junk I had. For someone who has moved 7 times in the past two years, that was a lot of baggage to carry around. Something needed to change.

Now, I still love to shop, but I have definitely curbed my impulse shopping habit. Here’s 10 steps I took to stop emotional shopping:

Clean out your closet

This is the only way to see just how much stuff you have bought and things you haven’t even worn. When I cleaned out my closet, I realized I was getting rid of hundreds of dollars of clothes that I had not worn once. What a waste!

Research classic, staple items you need to build a solid wardrobe

No matter your personal style, figure out the basics. You likely will want a nice coat, a few pairs of quality jeans, some black heels, etc. Write these things down! They are items you will want to invest in and maybe even splurge on. Predict how many years of use you can get out of each item.

Make a list of all clothes you need, and which season they fit

Keeping a running list of every item of clothing you need will serve you in so many ways. If you’re having a moment of weakness and want to impulse shop, you can use this list to make sure you’re buying only things you actually need. This list also provides opportunities to find more items on sale because you know what you’re looking for.

Be smart and buy at the end of the season

Have you ever noticed how swimsuits go on super sale at the end of summer? When at the beginning of summer, they are ridiculously expensive? When you create a list of exactly what you need, you can be on the look out for these end-of-season deals and can save a ton of money.

Sure, you might miss out on buying the hottest trends of the season, but trends come and go anyway. To me, spending money on timeless pieces that I can wear for years to come is worth far more than buying a new trendy piece every single year.

Save up for high quality pieces

If you are buying an item that you will wear almost daily, then it is worth it to splurge on a higher quality. For example, when I lived in Iowa, it was imperative that I had a winter coat. I wore it every day for almost 6 months out of the year, so it was worth it to invest in a higher quality coat versus a cheap one. Plus, it kept me nice and toasty 🙂

If it’s not on your list, no buying!

This will force you to really think through your purchases ahead of time and eliminate any possible impulses.

Acknowledge your emotions before shopping

Be aware of how you feel and be honest with yourself. Are you shopping because you’re trying to fill a void, or are you truly shopping because you need clothes?

Ask yourself how many wears you’ll get out of that outfit

Calculating cost per wear is a great guideline to know if something is actually worth it. You can learn more about it here.

Only buy clothes you absolutely LOVE

If you’re like me, half the stuff you buy on impulse is total junk. Maybe it was on sale or maybe you were just feeling emotional while buying it. If clothes don’t make you feel great, then they aren’t worth buying.

This can be a hard lesson to learn for some who view clothes as simply functional. Clothes can say so much about you, so I encourage people to spend time and money dressing themselves in a way that makes them feel great.

Have fun and shop on!

Shopping can still be fun, even while trying to curb impulse shopping and while sticking to a budget. Be smart about your purchases and be in tune with your emotions and you can’t go wrong.