Is Lifestyle Creep Taking a Toll in Your Life? Here are 5 Effective ways To Dig Yourself Out

Lifestyle creep occurs when one's standard of living increases with the rise of one's discretionary income, and former line items that were once considered luxuries are now much-needed necessities. Recently, lifestyle creep has infiltrated into my life, and let me tell you, it is not a dog that I am going to let hunt. 

Today, I sat down and reviewed my end-of-month budget with the Every Dollar App, and I was taken aback by the ratio of what came in vs. what went out. Now, we have some serious cleaning up to do. The holiday season is approaching, and I promised my children new tablets this year. This means I have just over 45 days to save up and buy 4 tablets for my kiddos while getting our current debts under control.

04 Benefits of Overcoming Lifestyle Creep

01. Building Emergency Fund

We recently saved the initial $1,000.00 in our personal emergency fund. However, we have had to drain it to keep up with the pit we have fallen into. It took us a month and a half to build it; given our current finances, we will be lucky to get it back up by the time income taxes hit.

02. Debt Reduction

Overcoming this hurdle means that we will be able to throw a lot of our non-discretionary funds towards debts.

03. More Discretionary Income

With increased discretionary income, we can start saving towards personal goals such as saving for vacations, a house downpayment, and creating a small business. 

04. Reducede Finanacial Stress

The less we owe out, the less strain we place on our finances, and the more we can enjoy the fruits of our labor. Currently, we work just to make ends meet. The goal is to become financially free.

05 Ways to Overcome Lifestyle Creep

So, what am I doing to help fix the ramifications of Lifestyle Creep? Well, I'm glad you asked! In this blog post, I will share 5 practical financial changes we are implementing to help dig us out of the dreaded pit of Lifestyle Creep.

01. Establish Financial Goals

A | Our short-term financial goals consist of paying off 1 of our debts in November.

B | Save $600.00 in our emergency fund by December 31, 2023

02. Budget Consciously

Establish and adhere to a budget with the express goal of bringing in more and spending less.

03. Prioritize Savings and Investments

To set up auto drafts directly into our savings and investment accounts so that our savings goals are being met.

04. Practice Mindful Spending

This goes back to the budget; if the purchase is worth more than $5.00, including tax, then I am going to write it down in my journal, explain why I made the purchase, and reflect on whether it was a necessary purchase or not. We are also going to start couponing, changing to cheaper brands/ alternative products/ methods, and using money envelopes.

05. Weekly Financial check-ins

Each week, we will plan out the bills for that week, and we will talk about what we need to do to meet our income needs, be that making more money by taking on more hours or cutting back in an area for the week to make it work.