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?

also if it is a valuable jewelry, you may resell it later on, or keep it as family heirloom to pass on.

I have been similar in the past and I can go back to it if I don't watch myself.
For me, writing everything essential down (direct debits, insurance etc) and knowing the total of those helped, as it generally doesn't alter month to month.
So for example, If you earn £1000pm and you know £300 is essential spend, you should potentially have £700^^ left. But in reality, I'd end up with very little left over so I knew I'd basically blown that £700 on crap. It was an eye opener, and knowing those totals helped.

Cancel Amazon and remove all the shop/buying apps from your phone. It's far too easy to just pop on there when "I need… " comes into your head. You've ordered it before you've even asked yourself if you need it. You almost certainly didn't need it and all those £6.72 purchases that you think are inconsequential all add up.
People on here seem so against cancelling Amazon because they think it's cheap.
Believe me, spending a couple of pounds extra buying that planned purchase thing you need at the supermarket or elsewhere is nothing compared to the money you will save by not making all the unnecessary impulse purchases because it's three clicks and far too easy.

Boredom surfing on your phone is an easy trap to fall into, you see things that you then can't unsee and you tell yourself you neeeeed it. Remove the apps so then you can only shop on the iPad at home or on your laptop etc - even if you end up trying to shop through the browser on your phone, it's so clunky you're much more likely to give up before you part with your spends. It cuts down your window of opportunity and you'll save a fortune in the long run.
Good luck op.

When you buy the treats, do they actually make you happy? Or do you just get a fleeting moment at the time of purchase? And then you find you still want something else? Then something else? And something else.... never satisfied.
Recognise that acquiring stuff doesn't make you happy.

Check out Ladies Finance Club. Really good to follow on Insta even if you don't sign up
www.ladiesfinanceclub.co.uk/

Also... I used to be like you and had no savings for years... living hand to mouth. The only way I've achieved it is by paying myself first when I get paid - straight into an ISA that I keep hidden from myself and never touch. I've been shocked at how much I've saved and it's such a nice feeling.
I also use the Chip app, which takes small amounts out of my bank account and saves it for me. Again, really shocked about how quickly it adds up and I don't even notice it coming out. Then I either split it into different savings goals in the app or use it as a lump sum, e.g. whack it all straight into my pension

Cold turkey as it were on one aspect of your life may be the answer. Easiest seems to be no new clothes for a period of time, say this year.

Think what you have bought over the past 6 months.
How much enjoyment do you still get from them?
Remember that next time you want to waste money.

We used to overspend and used all our (v.good) income each month. As we approached retirement we realised we needed to up ppur savings massively. We now have £100 a month persoal spending for anything we want but don't need. So for me this is mainly clothes, for my DH mainly bike stuff.

When we atarted doing this it was £200 per month, then £150 and now it's £100. Other savings go into one account but on my spreasheet show as different pots e.g. retirement, cars, christmas, holidays
Every time one of us get a payrise we add half to the savings pot - that was we have a little more money but also still increase the saving
Any small gains such as small lottery win, money from surveys, etc goes straight into the retirement pot.

I found this OP - DH and I have had a reasonably substantial income drop over the last few years and we've been talking about how lifestyle creep took over for both of us and we have next to nothing to show for it.

Yes, we had a couple of fantastic holidays, and some amazing meals out, but we both fell into the trap of living a lifestyle that we could but couldn't really afford at the same time.

I have a set amount a month that I'm free to spend how I wish, so if I want lunch out or to buy a mascara or something I can but when it's gone that's it. The rest of my money that isn't for bills gets transferred straight to savings on payday. That way I've managed to avoid the worst of lifestyle creep as if I get a payrise, I just adjust my standing order to my savings account by the relevant monthly increase (or I've increased my pension contributions at promotion time before instead).

@onemouseplace

I found this OP - DH and I have had a reasonably substantial income drop over the last few years and we've been talking about how lifestyle creep took over for both of us and we have next to nothing to show for it.

Yes, we had a couple of fantastic holidays, and some amazing meals out, but we both fell into the trap of living a lifestyle that we could but couldn't really afford at the same time.

This is exactly it. We have some great memories, but not too much to show for the change in our salaries. I wish I had not noticed my salary changing - definitely need to refocus!

Depends on your priorities
Get paid
Pension already deducted
Bills paid
Regular savings paid into like a bill

I've never been one to "keep up with the Jones"

@grannycake if you don't mind me asking, how do you keep track of your "fun" spending amount, to know that you aren't exceeding your limit or just to know how much you have left?

The only way I can seem to do this is if I deal in cash, though I have heard good things about Monzo for helping to allocate "pots" for monthly budgeted amounts (need to investigate).

What worked for me was going cold turkey for a bit and not spending anything for a while except food shopping (with a certain budget) and regular expenses like petrol. I wanted to get back to a little purchase feeling like a treat.

I havean enormous spreadsheet. The money is transferred from our main joint account into another account along wilth the rest of our savings - in the spreadsheet this shows as Me, DH, Hols, Car, Xmas, retirement etc but is actually all in the same pot. Anything I spend I do through my credit card and then I transfer out of savings back into my current account when the bill is due. E.g I bought a part for my bike on ebay yesterday - this was £85 but I won't pay that until the 15th July so I've noted when it is due on the spreadsheet (both savings (coming out) and current acct (going in)

Thanks @grannycake, that's super organised, and I think demonstrates that I need to be more proactive in managing our finances as a whole rather than blindly spending.

@SnoopsCaliforniaRoll Like I said we didn't used to be like this. What has helped (in a strange way) is that we put all our spending (excluding direct debits for bills) onto a joint credit card. That gives us a very hard wake up call every month as it is paid in full. Last month (for various reasons) it was £1500 - this month it is £595 as I started to feel we were getting back into old habits. I think I spend about 10 mins every morning just logging spending and about 30 mins at the strat of each month doing transfers

Try this OP

You don't have to give your email

You must really enjoy your job if you do that spending a lot, but that's good of course.

www.moneysavingexpert.com/shopping/demotivator/

I fritter money on food but thats it.

Top tips
Start with an overhaul. Go through all your bills-switch and save. Ditch subscriptions. Sign up to MSE newsletters.
Make yourself an appointment with yourself every Saturday morning as if you are meeting your bank manager. Go through your bank statements for the last year and work out where your money is going.
Make a budget and transfer yourself a weekly amount
Plan your food shop..1 monthly big shop and top up twice a week in the supermarket
Work out what you want to do with your social time and how much..prioritise hobbies etc., save money meeting friends for coffee, eating in etc.
Budget and plan a few months ahead e.g. clothes, house items, that way it feels motivating
Save on the day you get paid with automatic transfers

1. Do you have a pension and are you paying enough into it
2. Do you have debts to pay off, funds for rainy days, emergencies and big one offs?
3. Mortgage or house deposit?
4. Anything left?

I have a small emergency fund which I lock away in 1 year bonds. I can access it but will lose the interest so I am not tempted.

Good banks for saving are Nationwide and Tesco as you can name the accounts e.g. Holiday Fund, and set a goal and see progress towards it.

Nationwide have a Triple Access Saver, you can only access it 3 times a year, good for the beginner saver who is a bit worried about locking it away.

I have my salary paid into one account then a massive chunk goes into another account from where all the bills come out of (that has a small overdraft). It means I can service the two separately and if I forget to look at the bills account for 6 weeks or so nothing bad has happened.

I budget an amount for events and book them ahead, birthdays, trips etc.

I also bought a Monese card, it is a prepaid debit card and the free one you can only transfer 200 a month before fees get charged so I personally think its quite a good bridge between cash and having direct access to all my money.

(measly money I should say 😂)

You might also want to do an audit of a category of things you know you spend on. For example make-up/toiletries, get evey piece you own and lay them out on your bed.

How many of them are unopened?
How many are duplicates or near duplicates?
How many are only half used?
How many haven't been used in over 6months? Over a year? (Really inportant for make-up because bacteria can start to build up and cause you problems like eye infections)

More importantly, identify the ones you DO use regularly until they are gone!

This will help you to see that you don't need more, and that impulse buys are more likely to be in the first four categories. And if you add up what you spent, you are more likely not to repeat the mistake. I've used the eg of cosmetics, but for you it might be jeans, wellingtons, handbags, note books, or tea towels .

I don't work at present, thanks Covid.

However we have always lived off DH's salary and saved and spent my PT salary, anyhoo back to the question in hand.

We are more or less mortgage free, we cleared the big one a few years ago and took out a second smaller one to do the kitchen and bathroom we owe £2k on this and pay £60 a month, we can't clear it until the end of the term. We used to pay in excess of £1,000 a month on the mortgage so that still gets saved.

In addition we nearly always have something left on DH's payday so when the money drops into the bank I transfer what was left into savings on the basis clearly didn't need it, so save it.

We keep about £5k in an emergency fund and the rest goes into premium bonds.

In nine weeks (not that I am counting ) we will have a dual income of DH's final salary pension and his normal salary (he is working for one more year to wait for state pension which will then leave us on the income we are on now.

With that extra income we will freshen up the house, paint, paper, new couches, new mattresses and please God this years cancelled holiday and the rest will go straight into PB's.

Saving is addictive once you get into the swing of it.

Good luck.

@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!).

I don't.

I saved as much as I could from the get go because my parents had drummed into me that capital invested in property was the best way to save and become secure enough to be able to relax. Everything else ie random possessions is a depreciating asset, a game you'll never win (the comparison trap - because there will always be somebody who has a newer/better thing than you). A lot depends on your upbringing... but you can research all this if you're interested in reframing your outlook - at least you have noticed! How are your friends? If very materialistic perhaps try to find some distance? Can be hard if your circle is invested in this mindset....

Try reading a bit about minimalism. Gratitude. Also learn about the psychology of advertising etc and how they suck folk in. I was taught to be really cynical about advertising by my parents. Also fast and slow thinking - Daniel Kahneman (check spelling!) to help understand about long term v short term goals etc.

My mother worked part time, my father full time (he wasn't ambitious at all and plodded along until he retired) my mother will tell you that she happily lived beyond their means all down the years, my father died and my mother then realised that the pensions they had were pitiful, I had tried to talk to her twenty years previous and was dismissed out of hand.

DH and I spent a lot of money that could have been saved eating out in the 90's, spent the 2000's broke due to house move North/South after DH was headhunted, salary increased but not by 4, but the mortgage was crippling for a very long time add a much longed for baby into the mix and money was tight.

I hated how broke we were then and started to save because I was determined that I didn't want to end up like my parents, my mother does ok on her state pension but my sister and I top it up by £150 a month each.