Lifestyle inflation

[SnoopsCaliforniaRoll]

I have come to the horrible realisation that I have made the mistake of / given into massive so-called "lifestyle inflation", and need to figure out how to get myself out of this thought process!

As I have moved up in my career and salary, I have been almost excessively upgraded every area of my life (food shopping, clothes, car etc) and realise I have been hugely influenced by social media darlings. My "wishlist" for new clothes and products is huge and it's making me feel depressed and guilty, as I could have been saving so much more.

This was triggered by me dipping into my savings to by an expensive piece of jewellery, just because I got a bit obsessive about it. I realised that new graduate 21-year old me would never have dreamt of being so frivolous. I don't think my comparative "happiness levels" have really changed, but I'm spending so much more of my income as a proportion.

I have some big savings goals for the next couple of years (TTC, new house) and (while I am lucky to save a bit), I realise that I'm living payslip for payslip because I'm looking for ways to spend money to keep up with the Jones's.

Has anyone managed to change their spending habits and mindset? How can I tackle this lifestyle inflation that I've left unaddressed for the the best part of two decades?

I had to tackle my spending habits though necessity rather than choice. For me, it was saving up for a mortgage and then having a baby not too long afterwards.

I replaced magazines (this was before social media) with books (library app). started reading Moneysavingexpert where the people on that site focussed on saving money rather than spending it. I turned money saving into a new hobby and tried new skills like baking, knitting etc. Not saying I was brilliant, but it was fun to give it a try.

The key is not to think of it as depriving yourself, but I reframe it as making my money work better for me. For example, I'd rather give up shop bought coffees for a month and treat myself to an expensive lipstick. So I cut back in one area to spend in another.

I'm in the process of trying to avoid this. I've had a career break for 3 years (caring responsibilities) and I'm back in a jew job now. We've lived without my salary for all those years and I'm really keen not to just spend it all on all the things we had to say no to during my time off.

So we've paid off the credit card, we've consolidated a couple of loans (pre career break, house renovation loans), and we're saving like mad.

I still allow myself a couple of new things, but really try to question whether or not we need it. It's dull and hard. But, watching my savings grow and my debt diminish is the best feeling ever. One way I've been managing it, is pots of money. We've opened up a few savings accounts. Christmas. Holiday. Extension pot, general savings so we have a 3 month buffer, and so on. It's been really useful to use the different pots like this.

It's a balance. It's good to save when your income increases but it's also good to treat yourself as a reward for all the hard work, which has paid off.

I keep it simple and have rules.

• I have regular isa savings that go out by dd on payday.
• All bonuses go directly into pensions for both of us. No bonus treats.
• no takeaway coffees. We need decent stuff and use keep cups.
• I pack my lunches. Always.
• All luxury or treat purchases must be waited for and saved for from scratch (on top of isa) This helps ensure I want it and means I appreciate and enjoy it.

• no expensive car (or any car!) or expensive phone (£9pm SIM card and a Samsung bought outright for 200-250 Every 2-3 years.)
• Do not pay full price for clothes or shoes. Ever. There is always a sale, coupon. If there isn't he has to find a different generic blue jumper
• buy presents throughout the year (when in sale or on offer!)

Thank you all, really good advice.

@purpledagger - I have missed the MSE forums for keeping me on the straight and narrow! I have been spending so much time aimlessly scrolling through Instagram, and being influenced to buy or covet stuff that I didn't even know existed before! I've just this morning deleted the app because the iPhone time limits were not strong enough to keep me scrolling.

Definitely need to see where we can cut back without feeling overly deprived, and to reevaluate what is a need vs must.

I also desperately need to get into the mindset of properly saving up for or waiting for luxuries as a PP said - it sounds awful but I have this "need to have it now" mentality

@OneRingToRuleThemAll

It's a balance. It's good to save when your income increases but it's also good to treat yourself as a reward for all the hard work, which has paid off.

Agree - I need to find balance. At the moment I'm busy "rewarding" myself far too much!

@DonLewis

I'm in the process of trying to avoid this. I've had a career break for 3 years (caring responsibilities) and I'm back in a jew job now. We've lived without my salary for all those years and I'm really keen not to just spend it all on all the things we had to say no to during my time off.

So we've paid off the credit card, we've consolidated a couple of loans (pre career break, house renovation loans), and we're saving like mad.

I still allow myself a couple of new things, but really try to question whether or not we need it. It's dull and hard. But, watching my savings grow and my debt diminish is the best feeling ever. One way I've been managing it, is pots of money. We've opened up a few savings accounts. Christmas. Holiday. Extension pot, general savings so we have a 3 month buffer, and so on. It's been really useful to use the different pots like this.

Earmarked pots are good. Would you mind if I asked what type of accounts you hold these in (or are they physical cash/proverbial)?

The problem with one of my savings accounts is that it is easily accessible - so when an impulse purchase takes me, I find myself raiding it and moving cash to my current account! I am going to bite the bullet and put it into premium bonds or something less accessible.

I would love to get back into my old mindset, when I had less money. I felt the value of it more, and I didn't actively "go looking" for ways to spend my money because, unlike now.

@SnoopsCaliforniaRoll I was definitely of this mindset a few years ago, and a lot of it would be mindless treats - sushi for lunch, croissant for breakfast, random skincare or nail varnish, new clothes etc because I was bored at work. Takeaways. Read Mr Money Moustache, which is a bit crazy, but realised how much money I wasted each month. Used You Need A Budget for one month and was horrified - hundreds of pounds spent on alcohol and food just catching up with friends and having nights out.

Have really tried to change. Have one takeaway every couple months, do dinner parties with friends or gym classes/runs etc also as well as nights out (pre-covid), walk to work to save the tube fare, get one treat lunch a week, cancelled sky and tv license (just use Netflix and Prime), and I put things in my online basket and then wait three days to buy it. Often I realise I don't even remember what's in the basket, shamefully, if I can't remember or don't still really want it I don't get it.

In one year I'd saved up enough for a flat deposit. Shamefully I'd been in debt before then. I recommend a stocks and shares ISA for savings. Buy a basic tracker index fund like Vanguard, or use something like Nutmeg which I find easier. You can get your money out at any point, but it takes a few days. Plus I see it growing (18% in the last year and a bit) and it motivates me not to touch it

That is amazing @A1b2c3d4e5f6g7 - really inspiring!

That's exactly what I'm doing - mindless spending and seeing things which are definitely not essential (like Sky) as being essentials. It's going to be a brutal time reflecting on my spends...

Do you have a savings goal? Could you reframe the mindset from, for example, £200 towards x, instead of on the handbag/coat/whatever?

@Eileen101

Do you have a savings goal? Could you reframe the mindset from, for example, £200 towards x, instead of on the handbag/coat/whatever?

Good question Eileen.

The problem is - and this shows my probably irrational mindset - that my savings goals are really big eg I want to have £30k saved to help manage if I need to take time off during maternity leave and for future childcare costs.

What I find myself doing is thinking - stupidly - that that goal is so big and far off (as we are TTC) that splurging on a new handbag now won't hurt, also because I won't get to do so once a baby arrives.

Definitely need to reframe my thinking, and stick to it.

@Eileen101 that's a good point about mindset. There's a theory from a book I read about that helped me (I think its Your Money Or your Life) where you're meant to shape it as in how many hours you're giving up to get something to see whether its worth it. Like for example, that croissant (eaten in one minute) is one hour of your salary. That new dress is eight hours of salary, the new phone is a whole week of your salary. If you don't buy it, that's how much time you save off your working life at the end for retirement.

Could you reframe it as: "that new handbag is equivalent to 3 days of additional maternity leave"? Make it directly relate to the baby.

I’ve never been a regular user of takeaway coffee or sandwiches, so I can’t say how much it saves.

We used to shop in Aldi and Lidl, but had to stop that because they don’t deliver. Food bills increased exponentially. We’re going back to cheaper supermarkets now, so hoping to spend less.

We didn’t eat out much, but obviously haven’t in the last fifteen months. Very few takeaways too. I can’t say I’ve felt deprived.

@Fullofthejoysofspring - that's exactly what I need. I had never thought of it like that before.

Are there some people who genuinely don't experience lifestyle inflation or that temptation to 'upgrade' everything as they earn more?

I feel like that is the kind of strength I need to develop.

Maybe they don't consciously think about what they are earning, so don't open themselves up to temptation. I also think my financially challenged childhood has led to some unhealthy behaviours now (we were skint!).

I’d break the £30,000 into more easily quantifiable chunks - so £30k over, say, 18 months (?) is £1600/month, for example. And that’s the amount you set aside into a separate pot the same day your salary comes in. (Obviously I’m making assumptions left right and centre here.) I’d always give yourself some treat money though, otherwise it’s very difficult to stick to.

For a while we had one of those 'offset' mortgages where your balance showed as the total amount you owed on your mortgage - that was a nightmare for me because you can't actually judge if you need those shoes when your account balance is minus £123,456!

I was going to say make it a household rule never to impulse buy but if it was as easy as that you would have done it already!

Definitely change your savings accounts to not be instant access. Make the DD's for savings come off first, as soon as you get paid, so you're not carrying a balance. If your cards are 'saved' on your computer etc then delete them - even the act of going to dig out your card will give your head time to catch up with your heart. Follow different people!

Oh @HoldontoOneMoreDay this has triggered me - my electronic Revolut card gets a hammering when I want to spend on treats! I need to freeze it or delete it.

My DH was like this until two years ago. We have separate finances so although I was annoyed by it, I couldn't really stop him. It all changed was when we needed 6k to do some repair work on the house. At the time I was earning 22k and he was earning 80k. He started looking at how to finance it and I suggested we just use my savings and he could pay me back half rather than pay interest on a loan. He was stunned I had the money and embarrassed that he didn't.

He started using the same budgeting software as me (you need a budget- aka YNAB). It took him a few months to really get into it but he persevered. He's gone from saving nothing to saving nearly 1k a month without much of a change to his lifestyle. He's just more thoughtful about purchases and has learned that just because he has money in his account, it doesn't mean it's available to spend on the thing he wants. It cost about £70 for the year which he thought was ludicrous but by the time his trial finished it had more than paid for itself. I tried Mint which was a free alternative but it was more of a passive log of spending than a budgeting software.

I found it helpful to have a pot of fun money every month - DH and I have X amount we can spend no questions asked, or save for a couple of months for something bigger. It’s helped because if I really want it I have money set aside but in reality I tend not to spend it because there are few things I really want. If I do see a dress or something though I can buy it, but not the dress, shoes, lipstick, coffee out every day, nice lunch and dinner with friends.

After bills and spending budget, everything else goes into savings and if either of us wants to take money out of savings we need to talk to each other about what for and why. It helps me feel like I see the benefit of my work, while not frittering it all away.

I also try to avoid fast fashion for all of us, better quality clothes last longer, fit better etc and I really need to consider £60 on a new top rather than losing the £20 top included in my supermarket shop, if that makes sense?

This all makes perfect sense.

I think investing in the paid version of YNAB is a good idea - and to get my DH to use this too. Honestly though it is my spending which is the problem. It will help us to have a joint goal.

It helps to get a bit cynical about marketing too - my default when I see an influencer suggesting a product is to think about the kickback they’re getting, same as when I’m offered a discount from a shop. They’re all after my money and I am resisting their scamming efforts. Might be worth reading up on marketing tactics to more easily spot them, and get annoyed about them.

@SnoopsCaliforniaRoll

Are there some people who genuinely don't experience lifestyle inflation or that temptation to 'upgrade' everything as they earn more?

I feel like that is the kind of strength I need to develop.

Maybe they don't consciously think about what they are earning, so don't open themselves up to temptation. I also think my financially challenged childhood has led to some unhealthy behaviours now (we were skint!).

Kind of. My pay has risen by a third in a few years and childcare bills atr lover so I now havea decent disposable income.

I do have a house and kids, but a few years ago felt I should be buying a more expensive lifestyle now I was on ra higher pay grade.

However I got to a point where I totally switched my mindset when I realised I actually wanted a simpler life and made conscious buying and saving my hobby. I started saving the surplus and streamlining what I owned and wanted.

I still buy expensive items, but clothes to last and it's a treat a few times a year. It's become part of my identity now, and whilst I don't inflict it on people on social media I am more happier and comfortable as I don't have that guilt.

It worked for me, but it involves seeing things for what they are on Instagram and having the confidence to make that change.

meh... If it brings you joy - have it.