How to resist lifestyle creep?

[Woollencardi]

Dp and I are young professionals. Our salaries are good for our age and will go up every year.

We currently live what most would consider a good standard of living. Eat out, go to concerts, travel pretty much where ever we fancy. Essentially enjoying being young and child free. No plans for kids for a long while yet.

I see a lot of my friends “upgrade” their lifestyles, which is a personal choice and not a judgment. They rent the swankier apartment, stay at 5* hotels and upgrade to business class, always out at cocktail bars e t c

Of course it is tempting! But what are some measures we can take to resist this? I think the easiest one is to not rent a bigger apartment and stick with our little one. Perhaps increase automatic savings?

Create a budget that aligns with your values. I use YNAB and it's great. It might shock you at first how much you are spending on things that do not matter to you at all. That money can then be reallocated to your actual goals.

YNAB also advocates sinking funds or True Expenses which basically means setting money aside every month for large purchases. These could be predictable ones such as Christmas and also unpredictable ones such as emergency car/home repairs. This takes most of the stress out of these situations as the money to pay for it is ready waiting with no need to magic it up.

I earned a lot in my 20s/30s and regret not saving more. Pre-2008 crash I regularly got great bonuses. Holidays whenever I wanted, bought a nice car, went to loads of festivals, even took unpaid leave at one point to travel round the world. On the one hand, no regrets, lucky me, but now I feel much poorer because I have 2 kids, a mortgage, school fees and huge pension contributions. And nowhere near the bonuses I used to get. Live within your means. At one point an ex bf and I bought a 4 bed house (2007) just because we could. Then we split up. Then 2008. I wish we'd just stuck in our 2 bed flat as that caused a huge headache. I tempered my spending a bit after that but I could be so much better off now when I really need it if I'd been wiser then.

Deffo increase savings.

I don't earn loads, but every pay rise I've had, whether COL/inflation/new jobs I've increased my savings DD for half of the increase, put another quarter in the joint account for general spending, holidays and such and a quarter is mine to do what I want with

It's enough that I notice it in my current account so I can afford to splash out occasionally but I get so much more satisfaction from seeing my savings increase.

I think pay yourself first is the best advice. We’ve always treated savings as a bill that has to be paid. Lifestyle creep becomes quite easy but it’s not necessarily a bad thing if it’s considered and aligns with your priorities. Eg when I was young and single, I’d be quite happy to travel and stay in dorms in hostels. Once I met my husband that way of holidaying disappeared and we went for nicer places and we liked a bit of luxury. With kids my priorities have again changed- I like having a pool as they enjoy it and it pains me how much a decent holiday in school holidays can be.

Time has become more precious than money for me (once nursery fees were paid- before then I didn’t have enough of both!) so I’m prepared to spend on certain things to make my life easier. one thing I do notice though is a lot of the 20 somethings at work with no kids spend a fortune on beauty treatments but will bring their own lunch in saving loads compared to me (I tend to buy). It would be easy to go ‘ oh they’re spending loads on their nails’ but actually I’m probably spending more on getting pret than they are on the beauty stuff. I just think you’re spending changes at different life stages.

Just decide what your priorities are, what sort of person you want to be, and live that way. It attracts like-minded friends.

If you think drinking cocktails and staying in 5* hotels is the recipe for happiness, do it. If you don't, don't, and feel confident about it. As PP said, saving for things that matter to you is a good way to ensure your money isn;t frittered away on things you don't really care about.

I treat our finances like business finances to try to make the most "profit" (savings) each month. (Accounts nerd so I record every transaction) but it's easy to see that our income has increased by 30% in the last 6yrs but our fixed outgoings are almost the same. Variables have increased but that's not really lifestyle creep, it's more that prices have gone up due to COL and kids are older and more expensive.

My thing is to buy what I want at the best price. I'm a cheapskate at heart, love a bargain and will always go for the cheapest.
I'm trying to buy better quality however it's hard to discern what is quality IMO, I have no faith in brand products other than they spend more on marketing.

Our main concern was to be able to afford our main outgoings on either one of our wages so we didn't overextend ourselves. Came in handy when DH was made redundant.

I can second YNAB. I use The Budget Mom Budget by Paycheck methodology for my monthly plan, and I use YNAB to track my digital cash envelopes (I’m not a fan of real cash envelopes—I prefer debit or credit cards (but I don’t carry a balance!)).

OP, the trick is having a budget, no matter how big your income gets. The mindset isn’t ‘I have a budget, so I can’t spend any money or do anything fun,’ it’s more, ‘I have a plan for where this month’s salary will go before it even hits my bank account.’