Decreeping the lifestyle
For some reason, I now have more jeans during the pandemic
“I’m afraid it’s creeping lifestyle. Very tough to eradicate.” ~ my friend Robin.
So I’ve been back on my budget for 2022 and already I’m seeing some areas of improvement. The lifestyle creep is real but first, let’s look at what exactly is lifestyle creep and how to manage it.
I like Investopedia’s definition, Lifestyle creep occurs when an individual's standard of living improves as their discretionary income rises and former luxuries become new necessities. The rise in discretionary income can happen either through an increase in income or decrease in costs.
I’ve had more disposable income in the last couple of years because I haven’t gone anywhere. It’s the decrease in costs versus an increase in income.
I’ve been trying to put more money into my emergency fund because there’s just one salary in this house but I’m also doing some pointless spending.
Part of it is on takeout, which I’ve talked about before. The other part is on loungewear because when I’m not working, I’m pretty much laying around like my friends’ pets, giving everyone side-eye and waiting for someone to feed me.
(Me, relaxing in my new loungewear.)
Also, I’ve bought more jeans, which is weird.
I don’t feel bad about this spending but I know it’s not sustainable in the long term. Plus, I don’t need a lot of loungewear. So knowing that I’ll have too many yoga pants, it’s time to put a plan in place.
Also, I want to redirect that money to my emergency fund. My goal is to have one year’s earnings saved. I’ll talk about that in a later issue if you’re interested. It’ll take a few years to do it.
So I’m doing three small things. Baby steps.
Work on the mental and the emotions
Do I deserve new stuff? Sure, within reason but rewarding myself with something every time something happens is a personal recipe for spending and clutter. (If you’re a regular reader of this newsletter, you know how I feel about clutter.)
Put a plan in place for wage increases, bonuses and tax returns
Found money is really tempting to just spend because you didn’t ‘earn’ it. To prevent that especially since tax season is here, I’m figuring out what I want to do with any returns or other money that might be coming in. Right now, I’m thinking a portion will go into my TFSA, a portion into my emergency fund and a small portion will be fun spending.
Budget (You knew it was coming)
Do we need to talk about this again? While I don’t believe that a budget solves every single financial problem, it’s really good for observing and curbing lifestyle creep. It’s hard to ignore the numbers when they’re in front of your face.
Now to go put on one of my new lounge pieces and be comfy.
This week’s readings:
The latest on food prices: Price Check: Four-in-five say they’ve changed food buying habits because of increasing costs (The Angus Reid Institute)
Written by me: Why female advisors have an advantage when working with couples (The Globe and Mail, paywall)
Take a guess. Why women are less likely to be corrupt than men (The Economist, paywall)
The Bank of Canada is ready to raise interest rates. How high could they go? (The Globe and Mail)