The 3rd Decade Podcast

Lifestyle Creep: The Subtle Ways Our Spending Eats Away at Our Progress

• 3rd Decade • Season 2 • Episode 59

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In this episode, Nikita & Katherine Chatmon (3rd Decade Volunteer Mentor), discuss lifestyle creep. We all experience some amount of this as our income rises, but this episode covers: personal examples, how to recognize when it's happening, why it matters, prevention techniques, and ways to manage it. 

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SPEAKER_00:

Welcome to the Third Decade Podcast, where we believe every young adult deserves the confidence to take control of their financial future. Whether you're just getting started or you're well on your way towards financial independence, we're here to give you the tools and guidance you need to build a life that aligns with your dreams. Let's turn financial uncertainty into opportunity. Together.

SPEAKER_02:

Welcome to the Third Decade Podcast. I'm your host, Nikita Wolf, and today I am joined by one of Third Decade's financial mentors, Katherine Chapman. Thank you so much for being here with me today, Katherine. I would love if you would introduce yourself and a little bit of your background.

SPEAKER_01:

Well, thank you for having me. And yes, my name is Katherine. I am a wealth manager for a financial firm based in Texas. And so we work with high network individuals. But a bit of my passion for is that I work with individuals who also do not have wealth. And so I do that in the evenings, weekends, just whenever time allows. I didn't start off with a finance background. I actually started in criminal justice. And what moved me into going into finance was that I took a white collar crime class and it irritated me like so badly how people like lost their money and no one went to jail for it. So that's what spurred me into going to finance, financial planning, And then just overall, just helping people with those with wealth and those without. And my passion project is helping those without, giving them tools, financial resources to help them get to the point where they will need a financial advisor in life.

SPEAKER_02:

That's awesome. That's a really interesting reason for the change in your journey. But it's kind of cool to see what inspires us in life and how different our paths can diverge from our original path by just, I guess, inspiring people. inspiration.

SPEAKER_01:

Yes. No, it's every time I tell that story, someone's like, how did you go from criminal justice to finance? And I get to give them the little spill.

SPEAKER_02:

Yeah, no, I like that. I would feel the same way. It's very interesting. So today we're going to be talking about lifestyle creep. I'm sure this is a term many of our listeners are familiar with. Another way that it's referred to is lifestyle inflation. But I'm excited to talk to you about this topic because I think many of us can relate. As you get further into your career, you start earning a little bit more money, hopefully. I think it is a little bit of a natural human tendency to just kind of buy the next step up of the thing you used to buy and other ways in which your lifestyle inflates. We'll cover lots of that throughout this episode. But yeah, I would love if maybe Let's start off by just defining very plainly, like what is lifestyle creep?

SPEAKER_01:

Well, we also call this lifestyle inflation. And so it's when you're spending like just slowly increases to match your rising income. And so it's very subtle, it's very sneaky, and it can just rob you of your financial progress if you're not paying attention.

SPEAKER_02:

Yeah, I think the first thing that comes to mind is like knowing people in my life who have done very well for themselves, but still find themselves in like a paycheck to paycheck loop. And I can't help but think to myself, like if I made anywhere close to the amount they're making, there's no chance I would like have nothing to show for that. But I think whenever it kind of happens slowly, like it can get the best of people. So I would love if you would be willing to share maybe like an example in your own life if you've experienced this or have a friend who's experienced it.

SPEAKER_01:

No. No, definitely. So when I was going through, you know, undergrad and stuff, you're a broke college student, right? So you're buying like whatever's cheap on the shelves, like what matches the budget? How much money do you have on your debit card to get you some food in your apartment? That's what it was. But then once I started like working, you know, in financial jobs and stuff, it's like, oh, I have more money. So it's like, I can get a new furniture set for my apartment. And then it went from a new furniture set to like, oh, I can upgrade my phone. And then it went to like, oh, I don't have to buy generic brand foods. I can buy name brand foods. So then I started realizing, I'm just like, wait, What am I doing here? And so even I had to catch myself is that, hey, just because I have more money doesn't mean I have to spend more money. So it takes a level of awareness that I have to be like, wait, wait, wait. like pump the brakes and stuff and even things it could just be subtle like not me but for one of my friends she got like a five thousand dollar raise and i was just like jealous but great for her and so one thing i noticed about her was that she started eating takeout more often like she was like one of those anti-food app persons but then she started using like doordash and uber eats and stuff and i was like girl i was like you need to calm down and And so before she knew it, like, you know, she got to her next paycheck and she was like, wait, I don't I have the same. She's like, I have less money than what I had before I got the raise. Where did it go? And so, yeah, it's just those little things. And it's and like I said, it's subtle and it's sneaky. You don't even realize it until you actually like look at your money. You're like, wait a minute. Something's not right here.

SPEAKER_02:

Yeah, definitely. I know it's oftentimes like the small and medium purchases that I think can add up and make the biggest impact because they are sneaky and you're not paying attention to it. You notice if you are going to buy a$5,000 object why you don't have$5,000 anymore, but you don't necessarily notice if you're doing a bunch of little$100 purchases along the way.

SPEAKER_01:

No, definitely.

SPEAKER_02:

So in this episode, we're hoping to help you as our listeners learn how to recognize lifestyle inflation, prevent it, and just manage natural lifestyle creep that happens. So let's dive a little bit deeper. Why does this feel natural for so many of us and sometimes even well-deserved?

SPEAKER_01:

As humans, you know, there's a few mindsets that I feel like everyone has. So the first one I would say is that I've earned this. So I deserve this treat. How many times people go to the gym and they're like, oh, I went to the gym. I'm going to reward myself. I go get a cookie. and then comparison culture is another big thing you know keeping up with the Joneses you look on Facebook and it's like oh this couple is in Thailand again or they're in Mexico you know and stuff and it's like you know they got a new car and suddenly like you're feeling like man I don't have any of that I feel behind and stuff and we all know keeping up with the Joneses is not going to end well for us because Like that lifestyle could be rented. When I think about this, I think about the influencers on Instagram who are like on their third or fourth house. They have multiple cars and stuff. And then like they were exposed probably like a year ago that they were like renting these jets, but they were like sets. Like you could, yes, like you can rent a jet set and it's like, oh, I'm catching flights and y'all aren't. But they literally ran at the set. So, you know, comparison culture is like really bad right now with Instagram and TikTok.

SPEAKER_02:

Yeah.

UNKNOWN:

Yeah.

SPEAKER_01:

And then lastly, I would say convenience and emotional spending would be the last one. So, you know, you've had a long day at work, you come home, you don't want to cook anything, and you call DoorDash to bring you food. Even like subscription boxes, like, you know, from this brand you like, they send it every month, you know, that's like your little treat. But little upgrades like that, they're small, but they add up fast and that's the sneaky part of it.

SPEAKER_02:

Yeah. And I, I guess we'll talk a little bit more about this later in the episode too, but we're not saying, you know, don't ever do these things. We're just saying, don't do them mindlessly. Like be aware of the trade-offs that you're making. If you do decide to, um, purchase a subscription box or something like that, or, or, uh, use convenience type of services. But yeah, this is, I think, something that I even struggle with. So I'm sure a lot of our listeners are already kind of relating to some of the examples that you're giving. So some other examples that I thought about as like kind of subtle ways that things can creep is like back in the day, I like had a very minimal like phone plan, like two gigabytes. It was honestly, and I had to share it with my husband. It was not enough, but then I kind of was like, well, should I just like, I'm tired of thinking about how many gigs I've been using in a month. Maybe I just go to the unlimited rather than like, okay, what's the next normal step up that would actually suit our needs, but not be excessive potentially. And maybe that was five gigs or whatever, whatever it may be. So yeah, you could look at it as like upgrading your phone plans or paying for the next tier on one of your subscription plans, flying coach rather than economy. And maybe some of these things are not as relatable, some people as others, but there are definitely some ways that subtle creep can kind of happen in our lives and drain the financial progress that we're trying to make. How about any like one-time splurges? What are some things that might come to mind, Catherine, for if somebody is accidentally maybe experiencing some lifestyle creep and that's coming in the form of like one-time splurges that then kind of become recurring?

SPEAKER_01:

Well, definitely like from things that I've seen, like some people will get like new game systems and And then with those new game systems come with like$60 to$80 games that you need to buy off of.

SPEAKER_02:

So

SPEAKER_01:

those add in. Previously, we've mentioned like TVs. It's like, oh, you've spent money on this TV, but TVs these days are just not built to last like they were. So, you know, if you don't have the warranty on them and stuff, you maybe get like three years out of them. And here you go again, buying another$500 TV for your living room because you need it big, right? For to watch sports and streaming and everything. Yeah.

SPEAKER_02:

I, that brings up an example to me. A friend of mine bought like a, they did a lot of research. They're an engineer. So they like wanted to make sure that they kind of did all the research they could on like the perfect washer dryer when they like bought their new house. And it was like one of those that comes with all the bells and whistles. And sure enough, it's been like two years. And it's like, now the computer is like within the machine is like not functioning right. And now like this expensive machine is like, Worse off than if you just bought like a very basic one. So yeah, I think that things like you said, are not really built to last anymore, which is super frustrating as I like to think of myself as a bit of a minimalist, like I'd rather pay a little bit more for like, something I know is going to last a long time than to like, keep on buying the same thing. thing because it's breaking every year and a half.

SPEAKER_01:

Right. And then even in my apartment, my refrigerator, it was probably like five years old. It died. Yeah. Yeah.

SPEAKER_02:

Yeah. Things just don't, don't last a long time. Unless there, there's a, An interesting subreddit actually called Buy It For Life that I recently learned about. My husband was like, I'm tired of having a bad vacuum cleaner. So he was like, I want one boring vacuum cleaner that is going to outlive us. So that sounds like a silly resource maybe, but that might be something that our listeners might want to check out. I'll link it in the show notes just in case. So I guess why does lifestyle creep exist? Like, what if it feels good and ultimately the person who's seeing that crop up in their life is not bothered by it necessarily because it's not harming them? At least it doesn't feel like it. Why should they care?

SPEAKER_01:

Well, because it's temporary satisfaction, like in the moment satisfaction, but temporary. What will your future self think? I think a lot of people, they're more focused on like what is day to day rather than, you know, 10 years from now, because I will say anything can happen. You know, you have a great job now. You have a great salary. But, you know, you could go out there and get hit by a car and you're disabled forever now. And that position may not last. Did you have disability coverage? Are they going to take care of you for life? Or how is it going to look from here now? You could get divorced and lose half your assets to your spouse, just depending on certain circumstances. So now you're having to regroup and rebuild. You may be left with some of the bills that two incomes were paying, but now one income has to pay. And then you add child support to that formula. I feel very sorry for those people who have to go through that. But yeah, it's just more so that, you know, you need more than like a rainy day fund because it's like, what if it's a monsoon? It lasts for, you know, it's not a rainy day. It's going to last for a certain period of time, you know? So you need to be thinking more of like from the future, like, okay, you know, if I work For some people, it may be like, OK, if I work hard now, like in my 30s and 40s, my 50s and 60s, I can kind of relax, you know. But there's also other things because it's like think about college fund for kids. Like college is going up like what, 30 to 5 percent every year. You know, some jobs won't hire you unless you have a bachelor's degree.

UNKNOWN:

Right.

SPEAKER_01:

You know, there's certificate programs out here that they could possibly do. But think about the cost is like college credit. When I went was like at my community college was probably like one hundred and fifteen dollars is way more than that now. And think about the time when you you have a child, you add 18 years to that. What is the cost going to be?

SPEAKER_02:

Yeah. I think one of the more dangerous forms of lifestyle creep too are the financed purchases. I think about people who maybe they're pulling in 150K with their spouse or something. And so they have like a car payment that's like 750 bucks a month or I've even seen ones like larger than that. But what happens if one of you loses the job, like you're still stuck with that payment unless you're willing to have your car repossessed or, you know, sell it potentially at a little bit of a loss. Like there are just so many things that I think make, um, make it even a little more dangerous to have like a financed purchase as part of like the way that you're upgrading your lifestyle. Then like, I personally would rather just like fork over a good chunk of money and know that it's not gonna burden my future self in the same way. If, if I, um, wanted, like, for instance, a car and I had a bunch of money just sitting around. But I think that the way that things are set up these days, it makes it very easy to, like, as you check out at pretty much any online store now for just like a simple pair of clothes or a pair of pants, it's like Kelarna in the corner is like, what if you just pay$40 four

SPEAKER_01:

times? Yeah. Sezzle pay. They're everywhere. Exactly.

SPEAKER_02:

it feels so small in the moment and then like if these people are actually using these services regularly it's like yeah sure if you're buying one pair of pants what happens with the other seven purchases you've made in the last month that also have small fees associated with them and it's like you're sort of burdening your future self and you're i think trying to disguise a little bit the lifestyle creep that is happening because you're spacing it out over time rather than doing it in noticeable chunks

SPEAKER_01:

Right. And along with that, with all those, I guess, paying for plans, they would say there was an article recently, a lady, she got into a trap with them because it was like, oh, paying for, but she was paying in for like almost everywhere. And then you have like seven plans coming out of your account. like your discretionary income each pay period. And she's like, oh my gosh, what did I do? So they're real easy to get caught in the trap, kind of like credit cards. But I guess the difference is that you can't really see it. Like you can see a credit card statement, like pretty easy, you know, but with these pay in four plans, they're like all separated. So you can't really see like, oh, this one's like$20. This one's like$50. This one's like$80. You're like, your brain isn't really like calculating. It's like, oh, 20 here. 40 here, 60 here. But then once you're seeing the deductions on your account, you're like, what did I do?

SPEAKER_02:

Yeah. Yeah. They make it harder to kind of keep track of and kind of know where you're standing. So I would love if, if you could share maybe a story about lifestyle creep. Like if, if, there's someone that may be a good example of, you know, you seeing this in somebody else's life, kind of how it started, what triggered it and what the ultimate impact was on that person.

SPEAKER_01:

Yeah. I'll go back to my friend that may get the$5,000 raise because like all my friends know I'm the finance person. So she was so excited to tell me she got the raise and I was like, yeah, congratulations, you know, and stuff. And so, yeah, like, noticed that she started getting door dash more often. And then I also noticed that she was buying more expensive clothes. And then I was like, this probably isn't going to end well for her. Not as criticizing, but I could just see the writing on the wall. And then she wanted to lease a new car. And I was like, Pause. I'm like, okay, so the lease is going to be how much and how much was your raise and stuff. She didn't end up leasing the car because by the time she got her next paycheck, she realized like, oh, I was kind of in the negative in my account. And I was like, well, yeah, you started spending more. We started eating more. You know, you started buying more things for your house and things. It's just like it's invisible because you're literally just like, oh, I have extra money. I can kind of get this and this things that I've wanted. And there's nothing wrong with that. You should be able to buy things that you want. You should be able to treat yourself, you know, like maybe like once a month, I would say, but not every day, maybe not every week.

SPEAKER_02:

Like Tom from Parks and Rec. I don't know if you watch that show, but just like treat yourself. It's just like your mentality in life can kind of catch up with you.

SPEAKER_01:

Yes. And then one of the things with this is that because now you have extra money, like you feel like now these luxuries have become necessities. And that's the part that we really start to see the creep because it's like, oh, I can afford this now. So So now I can get it. You know, they no longer see it as a want. It becomes a need. And that's why I try to tell people, like, you really got to differentiate between wants and needs because it's like you can want something. That's OK. But is it a need? And can you afford it? Like the other financial gurus will tell you that if you can't buy it twice, you can't afford it.

SPEAKER_02:

This might be a good chance to segue into talking about the hedonic treadmill, where you basically are kind of on this wheel where you identify that you want something to be different. So you kind of strive towards a new purchase. You get that new thing. You kind of ride that high for just a moment. And then you acclimate because that's the way our human brains are wired. And then the process kind of starts over again. As humans, our capacity for wanting more is enormous. almost like limitless. I mean, you think about these millionaires and billionaires still somehow feeling like their lifestyle is not enough, like they want to upgrade something. I knew somebody personally actually who like had a$2 million house. And then I was like, wow, that is an insane property. I used to take photos for them. And then they upgraded to a$4 million house. And I'm just like, it almost like never ends, I feel. And that's kind of just a perfect example of the hedonic treadmill.

SPEAKER_01:

Yeah, it's new stimuli. So definitely like once you hit like, I would say like it's kind of like a flat line, like you're going to have to readjust and like find like a new level of happiness. So you see that like your millionaire friend lottery winners also have that issue, like they'll have like this surge of happiness. And then after a while, they just drop right back down to our baseline happiness. You know, it's kind of like moving points almost like even people like accident victims would be subject gated to that. Also, they'll still return back to. you know, a certain level of like baseline of happiness after that. And so you see some people, they have to keep like getting like new stimuli to like stimulate like that happiness and stuff. Like nothing's never old enough to like make it last a lifetime, unfortunately.

SPEAKER_02:

Yeah. Yeah. It is unfortunate. I know this especially can particularly affect, um, young professionals who are just getting their first real paycheck, especially, I'd say, if they grew up maybe in a house that didn't have a lot. Or maybe, honestly, maybe it doesn't even discriminate against that. Maybe even those that grow up middle income and have parents that do give them everything, once they get a paycheck, they feel like, oh, great, this is money of my own. And they might finance a car in their first month at their new job, not realizing like, oh, Because I didn't have my ducks in a row, I didn't even think about how a 401k should play into this first, perhaps. And now I can't afford to save towards retirement. I'm stuck in this loop. So I know it can affect young professionals getting their first paycheck. And then it also can affect people who grew up without much and are kind of in a stage now where they're overcorrecting.

SPEAKER_01:

Yes, definitely.

UNKNOWN:

Yeah.

SPEAKER_02:

So could we take a second just to reflect on the emotional side where people kind of view money as validation or a reward? Like how, how do people move forward with that if they find that to be relatable?

SPEAKER_01:

Yes. Okay. So the first thing let's, Just double, I want to touch base again on how does it show up. So I did mention like, you know, things that were once luxuries, like they feel like necessities. So that's one way. You're spending increases like every time your income does. So you get a raise and you're like, woo, let's go out shopping. You know, like you are on paper making more money, but you're saving and investing less. That's or not at all. at a certain point. And then emotionally, like you would constantly feel broke, like even with a decent salary. So that's a few ways like how it will show up. So emotionally, if you are noticing things of like, you know, if you're the personality type that's like, Every time I get paid, oh, I have to go shopping. Not saying grocery shopping. That's a necessity. But I'm saying, are you going clothes shopping like every week? Okay. For some people that work like in the corporate world, they have to physically go to an office. You do need a few more outfits and stuff. But are you spending, are you buying like$80 outfits like every week? You know, it's like, oh, I've gotten a promotion. So now I can buy nicer clothes. I can buy nicer shoes, things of that nature. Are you like my friend? Are you sitting at home now because you're ordering DoorDash more, more and more? You know, you're paying those fees. You got to tip the person. You should tip the person who's delivering your food, you know, and increase costs. Because if you're ordering from DoorDash and those, you Sites like that, the price that you see on there is often higher than what it would be if you went into the restaurant yourself and tried to order. So all... It's a scam.

SPEAKER_02:

Yeah, it can it can certainly feel like that. Yeah.

SPEAKER_01:

Yes. But I just want people to be like, you know, you just have to be cognizant of everywhere, like where your money is going. And I know sometimes when you mention the word budget, people just freeze like it's a no, no word for them. And so how we have tried to combat that is that we tell people that we're going to have a money plan. We're just going to make a plan for our money. What do we want to do with it? Where do we want it to go? And what are some financial goals? I would say this is more of like how to prevent lifestyle creep. So number one, bare basics. I want you to track your spending. And that goes back to the other episode where I said that you take the paper bag, you put all your receipts in, and then we're just going to see like where your money is going. If you're a person that's like, I'm more of an online shopper, you don't have to do the paper bag with receipts. Like you can use something like mint or you need a budget or even like a simple spreadsheet to just like log your expenses into. Um, if you're a person that's pen and paper, I mean, write it down. You have to just start with like what works for you. Like me, a person, I'm not going to pull out a pen and paper. I'll use an Excel document, but some people are like, I'm not going to do all that work. So they may use an app like, um, uh, it's through Rocket Mortgage. They have a spending app. I can't think of the name right now, but you link your bank account to it and it will actually classify your expenses for you. Like easy peasy.

SPEAKER_02:

Yeah.

SPEAKER_01:

Yes. Next thing to prevent, you're going to have to set some clear financial goals. Do you want to buy a home, a car, travel, retire early? Your goals are going to help you give your money a mission. And so without that, I can't help you and you can't help yourself. And just without any of that planning, it's just, you're just like on a windy road, like no direction, no GPS or anything to do. And I think that's where a lot of people are. That's where the issue, because again, a lot of people, they think about the day to day. They're not thinking, oh, 10 years from now, they're not thinking, they're not even thinking five years from now of like, you know, what if something happens and I no longer have this cushy job? Like, where is that going to leave me? And so a third important thing, I want people to create a budget that grows with you. You can have majority of the things that you want. in life, you can, like, if you want to go get your hair done every week, you can. Just be smart about it. Like, do you need a$300 hairstyle every week? Like, no. Yes. There was one lady. She, you know, getting your hair colored is pretty pricey. That's a pretty pricey service. But what we had encouraged her to do is to reach out into hair schools instead. Because those students are learning, they usually have different tiers of students, like master students, students who are just learning. you know, you let a master student bleach your hair, win-win situation, you're getting your hair bleached. You know, it looks good because the teachers are right there checking off everything, you know, and stuff. And you're not spending 200 and something dollars on this service. You're spending closer to like a hundred and something, and you can still tip that student who's learning and they're getting their hours to graduate. So very nice relationship for everyone. But yes, like your budget isn't stagnant. It can grow. It can develop. develop with you as that income increases but you just have to be smart like what are our savings and what are our investments um also are built into there it's not that oh I got the five thousand dollar raise I'm gonna go to Ashley Home Furniture and get a new living room set like you can but let's just be smart about the goals

SPEAKER_02:

yeah I think it's really important to to try to think about your investments and your future self being taken care of before you necessarily start thinking about the other things you might want to just spend the money on that you won't necessarily have anything to show for in a couple years' time. I'm a huge fan of automating. And if we're talking about investing 15% of your money, that means if you get a$5,000 raise, figure out what 15% of your new income is and change your automatic contribution to reflect what it needs to be now to meet that, that goal. That way, you know, you're taking care of your future self and your current self can also enjoy some of the money in the way that you want to spend it.

SPEAKER_01:

Right.

SPEAKER_02:

What about a tool? Like I've heard about like a raise rule. Could you talk a little bit about, you know, maybe committing a certain percentage towards, long-term goals?

SPEAKER_01:

Yes. So a lot of people, when they're doing like their budgeting, they like to set like a different percents. Like they'll say like, oh, 50% for your needs and then like 30% for your wants and then the rest for savings. And it really just depends on like where you are in your financial journey. Like for some people, it may just be like 90% needs right now because we have, you know, overspent on some things, but we can work towards negotiating that down. But yeah, I was a good number to start with, with everything. It's just 10% to savings. And so a lot of people have a question is like, okay, well I've saved a good bit of money. Like when do I start investing? And so we typically say when you have three to six months of your expenses and a savings account, and I would say not just a savings account, I would say a high yield savings account, most definitely to put that in because it's helping you, you know, reach your goals faster. So once you have that in there, then we can turn into investing. And then we're not going to be callous with our investing. Like, We're going to either go into mutual funds, index funds. We're not going to stock pick any of that. We're going to be safe.

SPEAKER_02:

Yeah. Yeah, definitely. I'd like to maybe shift into talking about mindset, just talking about value-based spending and ways that we can be intentional about the upgrades that we do choose to make. So could you talk a little bit about how someone could make that decision for themselves and determine what is... really lifestyle creep versus what is like an intentional like lifestyle upgrade maybe?

SPEAKER_01:

Yeah, because it's easy to, well, let me back up. I wouldn't say it's easy because we're in this now. So I would say there is a thing I would call a spending triage. And so you will say, what do you actually need? And then what is just extra? And so you can look at, let's just say someone's in an apartment, maybe like not in the nicest neighborhood. We can look at things. It's like, okay, I want to move my family to this better area. You know, I want better for my family. That's definitely a value, but we're going to have to put a price tag on that and see if we can afford it because it's like, let's just say that we move three months later. I lose my job. Are we going to be in trouble?

SPEAKER_02:

Yeah, that's a great point.

SPEAKER_01:

Yeah. So I would say do, yeah, just do like the triage and just say, put your wants, your needs. What are things that you want? And then just try to see, like, you know, check them off, you know, and stuff. Maybe some people, I know there's some people, they don't have furniture in their house. So they do want a nice furniture set. I think that's of value and that they could absolutely get that. But it may not need to come from a store. You could get it off Facebook Marketplace from a lady who's upgrading her furniture. And she has this nice$600 set that you can take from her Facebook Marketplace, even eBay, Craigslist. I was going to say, I

SPEAKER_02:

love a good Craigslist fund.

SPEAKER_01:

Yeah. Look, if you're meeting anyone on Craigslist, just make sure you bring other people Yeah.

SPEAKER_02:

But yes, I know. Another thing I like to do is kind of redefine what a reward looks like. I know for me, I drive a very old car. It's like a 2004, but I like it. I could very easily change the car I'm driving. But like, to me, it feels like more of a reward to have a car that is reliable, paid off and that I'm comfortable in than to have a know a payment but a brand new car with a new car smell so kind of redefining like what reward looks like for you like what is more valuable to you when when making these decisions

SPEAKER_01:

and i think that would be more personal because it definitely depends on the person like for like me Me going and getting a smoothie from Smoothie King, that's a reward because they're like$8 now. That's my reward. But some people, they may justify like, no, I got to get something like$100 as a reward. But yeah, it would definitely come down to the person. And so if we're talking about cars, I would definitely... one thing I would tell people is never buy a new car because as soon as they're off the lot, that value drops. If you're going to get a new car, I would say get something that's coming off of a two-year lease because all the maintenance had to be done like through that, whoever owns, whoever the lease is through. And so, you know, the car is like in good shape and things like that. So, you know, there can be mitigation between of like, I want something new versus like something that's new to me. And I think it may still scratch that same itch that people may get in their brain for a reward.

SPEAKER_02:

Totally. Yeah. Just a way to still get something that resembles an upgrade to you, but a little bit more thoughtfully and strategically so that it's more affordable. Yeah. I love being the beneficiary of somebody else's lifestyle creep, like getting someone else's old thing that they wanted the nicer thing of, but they're original thing was perfectly nice, I will happily take that off your hands.

SPEAKER_01:

But I love going to Goodwill in nicer neighborhoods.

SPEAKER_02:

Yes, totally. Yep. Here in Tucson, we have Oro Valley is drivable. And yeah, it's where all the people with money live and donate their stuff. So their Goodwills always have stuff. That's funny that I'm not the only one that thinks about that. So is there anything else you want to talk about before we kind of wrap up our discussion?

SPEAKER_01:

Sure. I will give people a few tips of like how to manage lifestyle creep if you're like in it, like currently. So my first thing would say, I would say look for cuts. So are you paying for apps you don't use? You know, like, you know, your streaming apps would be the first thing. You could pause them temporarily. That's one thing. You don't have to cut them entirely out of your life. Are you eating out more than you thought? Or is there like a membership that you forgot you had? Like some people forget they have a Planet Fitness membership. They also make it difficult to cancel, but you can try. You have to physically go up there and cancel it. But, you know, look for things like that. You can also negotiate your bills like certain service providers. You can ask for better rates like your insurance, even your internet. or you can switch to like more affordable plans or is there like a step down from the one that you're using now that you can use and like and like i said this isn't permanent this is temporary this is to free you up you know some money that you can use to get whatever you bought like out of the picture so you can get back to your normal programming um and then also like all of this is a mindset game. So you will kind of have to like reframe your mindset, which again, that's not something you can do just overnight. This is going to take time. So just because you live well, doesn't mean you have to spend more and you don't have to look rich to build wealth. And so I would tell people like the real flex in all of this is just having options and freedom.

SPEAKER_02:

Yeah. Yeah, absolutely. I would rather look rich. just like a normal that's why they say millionaire next door you know that's where that concept comes from it's somebody who seems very normal and unassuming and drives the toyota and you don't think anything of it those people oftentimes are the ones best off than the people who are driving their range rovers and always wearing you know designer clothes and stuff

SPEAKER_01:

they sometimes top vehicles owned by millionaires are hondas and toyotas Don't let anyone lie to you. Is that true? Really? Yeah, no, that is true.

SPEAKER_02:

Wow. All right. I like it. I'm glad I drive a Honda. That makes me feel good. All right. Well, anything else? I want to make sure I didn't cut you off.

SPEAKER_01:

No, that's all I had for today.

SPEAKER_02:

Well, I really appreciate you kind of coming up with those tips. I do want to also just encourage our listeners to For a couple challenges, I want you to look at your last raise or your increase in income and just see how much of it you're saving or investing. And then to identify one recurring expense that you added in the last year and just ask yourself if you still value it. And it's okay if the answer is yes, but if the answer is no, then get it out of there. Get that money back and put it where it belongs in a way that aligns with your values. So thank you, Catherine, for joining me today and discussing lifestyle creep and all the different ways it can crop up for people. It is very common. I think most people can relate to it in some way or another, but it is manageable. And awareness is a great starting point. And just moving forward with more intention, I think, is kind of the key to managing it well. So if you got a lot out of this episode, please share it with a friend and we'll link in the episode description any resources relating to the topic. But thanks, Catherine, for joining us.

SPEAKER_00:

Thank you for joining us on the Third Decade Podcast. Remember, building your financial future isn't just about dollars and cents. It's about empowering yourself to live the life you want. If today's episode gave you new insights or inspired you to take action, we'd love for you to share it with someone who could benefit. Together, we can turn financial uncertainty into opportunity. Until next time, let's continue to embrace the journey ahead and take control of your financial future.