Avoiding "lifestyle creep" when coming from being skint?

[Lifestylecreep]

I've read about "lifestyle creep," the idea that you avoid luxuries when your income goes up so you don't overspend. But how do I do this if I'm coming from nothing?

Due to caretaking duties (mum had cancer and dad with dementia) as well as two young DC, I've worked minimal hours for the past eight years, plus mat leaves in between. Things have been very tight financially but we've managed by being extremely budget conscious. Mum died last year, dad's moved to a carehome, and my youngest is no longer in nursery. I also did my Master's and managed to move up two bands. So suddenly we have quite a bit more money coming in each month. It feels wonderful to have a bit of breathing room but I am also wary of spending it all away, also with cost of living. (We are far from wealthy, I'd say with my paylift and increased hours I'm nearing the middle class.)

But for example, I went eight years without buying a new pair of shoes. I'd love to treat myself! Or DH has been managing with the same winter coat for all this time, it's really time for a replacement. But that takes a large bite out of the extra £400/month I have now. (Not that I'd buy new shoes every month or anything!)

So any suggestions for balancing a modest increase in income with things that feel luxurious but are needed?

These are needs not wants. You will have a lot of things that need replacing and it’s better to buy good quality ones so they last another 5 plus years and then you’re not paying for them every year.

I think you deserve to treat yourself! Shoes and a coat are also not luxuries and if you are now in a position to buy these things without stress then you absolutely should. I only ever hear lifestyle creep talked about at the higher end of salary raises like going from quite a lot to even more!

Save first! Put half in an ISA.

That half for the future - the other half for today.

It sounds like you've had a hard time. Sorry to hear about your mom.

I think you have to buy eessentials.its only like being skint caused some debt. The first thing you do is pay off that debt. If you're not in any debt, then you upgrade your shoes and coats! Its not an extravagance. You may need to forfeit the extra money for a couple of months to get the shoes and coats (and whatever else needs to be replaced). But then you start to save.

Lifestyle creep starts with buying things you dont need. A coffee on the way to work every day. A Halloween wreath. Whatever crap you can buy that you dont NEED.

But that said, sometimes, it's nice to have treats. A meal out. A fancy candle/bag of coffee/a ridiculously over priced donut from the new artisan bakery that just opened.

Its about balance. But dont save over buying shoes! You need shoes!

Agree with pp that this doesn't sound like lifestyle creep, unless you make it a habit. Not sure if this is what you're after but I absl loved "What they don't teach you about money " by Claer Barrett which talks about personal finance.

Why not a) divert the first month or two of additional cash to stuff that needs replacing because you've been squeezed for five years then b) set a standing order up to your savings until you have an emergency fund, c) I have a standing order to "short term" savings as well which I use for things like car insurance but which you could use to save up for the next coat or whatever you don't buy regularly and then allow yourself a portion of the increase for nice things - be that saving for a holiday or deciding you really want membership to a local attraction this year, or whatever.

Avoiding lifestyle creep doesn't mean not buying new shoes when you need them. It means, if you've always been happy with a £5 bottle of wine, don't now think you need a £15 bottle just because you can afford it. Or like you say, you'll buy one pair of shoes that you need and like, then not buy another 3 just because you can.
Give yourself a bit of grace to enjoy the money that you've earned, sounds like you've had a hard time for the last few years. Put a fixed amount into savings each month then you can spend the rest as needed/wanted. You sound very sensible, I don't think you'll suddenly start spending like a rock star!

Agree these are needs but it’s how you address those needs that will influence your future.

When I have a ‘need’ I buy second hand, brand new with tags only but the highest quality thing I can afford. So last week I needed a red wool coat for a funeral so I bought a new Boden one for £12 off Vinted - 90% wool.

Save some and spend. Get £1k at least in a savings account and then start to replace your worn out clothes and shoes. It's ok to enjoy the fruits of your labour.

I allocate some money each month to spending on me (we don’t have small children). If a coat or shoes is more than I have in that account I wait until I have enough.

Longer term I do a monthly budget and put some money in a monzo pot every month for clothes. Then over time there's always something in that pot for say new shoes. If the goes over X amount, stick it in savings. Then there's no general savings that you dip into to spend too much from

Have you done a new budget spreadsheet? Basically work out what you need to spend on essentials, what you can afford to save each month and then set an allowance for spending. Put that allowance into a separate account if you want so you will only spend that or it rolls over to the next month.

OP you deserve that sense of ease and some treats but it’s probably true long term that your biggest ease comes from compounding your savings and watching them grow over time but you can do both as posters have described.

You haven’t been able to buy needs - good shoes and coats aren't luxuries and can be gained from Vinted or discount sites like MandM. There are different levels of bargain but every £ saved is a win.

Lifestyle creep is frittering money on crap and coffees. That doesn’t mean buying the odd random thing that makes you happy is wrong but do it consciously and knowing its value to you.

Do a free course like rebel finance to check your attitude to money. Sorry it has been tough - I hope you can enjoy the ease you know have. I save quite aggressively but splurged on a big hols this year - for me it was worth every penny. I get cheap veg from a surplus scheme, use olio, cook all from scratch, haven’t had new clothes this year other than when I got caught out in a jumper on a super hot day while away and I bought a shirt in a sale - most £ shirt for me but cute and saved me from heatstroke so worth every penny! I do go for some big nights out with a friend - those cocktails are worth it too!

I earn well but DH doesn’t and there are uni fees and clubs, and driving lessons and life. Every penny definitely counts.

See I think this only counts after you’ve caught up to a base level and after that you also have to weigh up what you want, eg you can want to have savings and not mind scrimping for a certain amount of time but after that what are you earning for if you ignore every nice thing out there!!

I am very money conscious but that doesn’t mean we don’t have treats. I like to save what we can, don’t like food waste and generally think about where our money is going. It can be difficult to shift your mind frame when you’re coming from a place of scarcity though.

I do a budget and literally have a pot for everything including clothes. We spend as we need but within reason. I would buy good shoes for example but not for ££££ same with all clothing really.

There is no point earning it really if you aren’t going to get some pleasure for it. Make saving a priority but also allow room in your budget for both the things you need and want.

Im sorry you have had a bad time. Defo buy new shoes and winter coat. You have made do for a long time and worked hard. Buy decent ones and enjoy wearing these are essentials. The last thing you want is illness and injuries from lack of decent clothing. If you said the £400 was on a party dress, wear once well that would be different.

So with an extra £400 a month, personally I’d add £100 to your monthly budget so your lifestyle improves a little, but I’d put the extra £300 straight in to savings. Transfer it on payday so it’s not sitting in current account tempting you.

I’d do 3 things - write a list of anything that needs replacing, talk to DH and agree how much of that extra money we’ll each have every month and how much we’ll save and buy what I need buy maybe look at Vinted/charity shops to see if I can get them but cheaper.

Agree with others that shoes and a coat aren’t luxuries though so if you need to spend more than you’d like to for a month or so to get what you need, do that (but I’d definitely be starting to put some of that money away now as Christmas is fast approaching).

Everytime I get a payrise I put half in my pension and half for increasing my lifestyle.

At the end of the month, whatever is left in my current account gets transferred to easy access savings for a general emergency fund e.g new washing machine, xmas, car bills etc. If that reaches a decent amount, I then start moving funds to more long term savings and chase interest rates.

"Treating yourself" is a waste of money, usually involving buy scented candles or some such fripperies.
Having good quality shoes, a reasonable amount of clothes and healthy food is what you should spend your extra money on initially. Then you can save.
If you don't improve your existence at all then what's the point in having more money?

If I was in your situation, I'd put £200 into savings and £200 towards all the things you haven't been able to afford to replace, until now.

I’ve kept a strict budget for years, despite my earnings over doubling from the time I was in serious debt and it felt impossible. I want to live modestly but equally I do recognise when I’m allowed a treat, a pair of shoes, coat or a nice holiday. I’m more of a saver these days, that gives me enormous pleasure and helps me feel secure. I’m quite happy buying clothes on Vinted or a charity shop! I don’t think I’ll change now.

Buying treats (which can cover a huge amount if things and experiences) is one of the things that makes life worth living. What’s the point of working just to pay bills and be the richest woman in the graveyard?

So work out what you want to allocate every month for fun stuff and also what you want to save or invest - ‘pay yourself first’ on every payday.

Ace, buy some new shoes. Then Do a proper over tne whole year budget. So account for Christmas. Birthdays, car insurance, pet insurance, money into savings for an emergency fund, clothes, school trips. So every month some money goes into paying those yearly things too…. Keep a track of it. You can use various apps to fo it. The emergency fund is a priority. Then stick to it, allow a treat allowance. That’ll stop creep.

congrstulations!

@Lifestylecreep take the word “ luxury” out of your post

Also, I have no idea what lifestyle creep is!

You need a new pair of shoes, DH needs a new coat. You buy them.

Apart from that, all you need to do is some regular saving because it sounds like you can do that now.

I don’t know if it’s just the terminology but there’s no need for all this angst over spending and saving. You don’t need to do a course to work out how to save.

There are essentials and there are luxuries. If you haven’t had a new pair of shoes for eight years, I’m pretty sure they’re essential.