Lifestyle Creep
Candlefocus EditorAt its core, lifestyle creep is the result of people looking for ways to spend more of their income than is necessary - in effect, bringing forward their future lifestyle into the present day. This phenomenon can be likened to an addiction – with individuals progressively increasing their spending and often becoming blind to their own patters of behaviour because they feel their earnings are enough to cover the cost. What they often don’t consider, however, is that if their salary were to unexpectedly drop, they would soon come to realise that their current level of spending is no longer sustainable.
In the long-term, lifestyle creep can lead to an accumulation of debt as people rack up credit cards, loans and mortgages through excessive spending on non-essential items. With the cost of living being continually on the rise, individuals who become ensnared in this cycle of overspending often struggle to get out of it, particularly by the time they reach retirement age.
Therefore, it is crucial that individuals are aware of their spending habits and constantly strive for a balance between savings and expenses and understand the true cost of what they are buying. The only way to guard against lifestyle creep is through careful financial planning and proper management of money, such as creating a budget and ensuring sufficient amounts are set aside for retirement and emergency savings. Doing so will help to reduce the risk of facing financial pitfalls as a result of lifestyle creep, and keep one’s spending in check for both the short and long-term.