29.03.19 | Lifestyle creep (and an attitude check)

By Jessica Sier 5 March 2019 2 min read

Dorothy Parker once said the most beautiful words in the English language were “cheque...enclosed”.

All of us, on some level, identify with that. Especially when the number on that cheque is heading north.

This happened to me at the end of last year; I got a pay bump.

Not a journalism pay bump, where another year of not being made redundant passes and you are rewarded with another $12 a month.

But a pay increase that was substantial enough for me to call my Mum to celebrate and buy myself a beaded, vintage, full-bodied skirt. And some shoes.

And because I practice the Barefoot Investor budget - where I split my income into:

60% Daily Expenses (including rent)

10% Splurge (vintage clothes and beers)

10% Smile (overseas trips and bigger purchases, like maybe a car)

20% Fire Extinguisher (pay down debt, savings, or investments)

I already had a system where the money was reallocated into various places and nothing really changed except I could afford things a bit faster.

But something weird is happening: I’m running out of Daily Expenses money.

The last two months, I’ve basically crawled on bloodied, desperate knees to the next pay cheque or worse I’m dipping into my Fire Extinguisher account for some extra dollars.

This is ridiculous and stupid and I’m a total dope.

Because I’m suffering from lifestyle creep.

Lifestyle creep is where you spend more because you’re earning more.

It’s as simple as splurging more regularly on expensive wine or frequent phone upgrades or snazzier birthday gifts or nicer hotels or front row concert tickets…

Each of those things individually doesn’t seem harmful, especially as you earn a little bit more. In fact, celebrating that kind of stuff is wonderful!

But the problem is, this kind of incrementally increased spending unintentionally resets your baseline. Your baseline is what it costs just to live as yourself.

This is what’s happening to me and it’s going to mess up my strategy and plans if I carry on this way.

How on earth am I going to afford a Cessna 172, flying lessons and a spot at Sydney Airport if money keeps flowing through my fingers?

So I’ve made some resolutions that involve me regressing back to my 22-year-old self.

When I first moved to Sydney I was earning very little money, living in a tiny room in Manly and had a $3,500 credit card debt.

Because there’s only so often you can jump the ferry before you get caught, I had to get super strict on what I was spending my tiny pay cheque on.

So I wrote it all down. At the back of every notebook, I wrote down what I was spending every day (and whether it was cash and credit) and this gamified my existence.

Each day was a competition to see how little I could spend. I would set myself little challenges, like could I last on $5 for the next three days?

That daily habit of writing each thing down was an incredibly powerful behavioural nudge and I need that kind of discipline back.

Spaceship readers email us all the time about their investment habits, their behavioural triumphs and give us fodder for our Real Money Talk series, and I need to take a bit of your terrific medicine.

So from now on, I’m going to clamp down and get mindful about my daily expenses.

And keep those dollars in the bank. Money is too hard to get to just waste.

Enjoy your week!

P.S. This header features Malory Archer, an amoral and harsh character, from the 2009 animated television series Archer. She knows how you get ants.

Words by
Jessica Sier Right Chevron

Jessica Sier is a financial journalist who currently heads up Spaceship's content. Prior to that she was a reporter at the AFR where she discovered breaking down financial bulls**t was a public good.

29.03.19 | Lifestyle creep (and an attitude check)