How to avoid lifestyle creep

10 Oct 2023

3 minute read

How to avoid lifestyle creep

Catching yourself upgrading your coffee order from medium to large? Purchasing the newest iPhone even though your current model is perfectly fine? This is called lifestyle creep, and it happens when your spending increases as your income does 📈. It can sneak up on anyone, regardless of income level. To combat this, we have four easy tips for you to try today so you can kick lifestyle creep to the curb 😎 

Live below your means  

Instead of spending all that you earn, aim to live below your means. This means making a conscious choice to spend less than you could technically afford based on your income. By continuing to live as you did before experiencing an increase in your income, you can funnel the extra funds into higher savings and investments and provide more overall financial security. This approach not only allows you to save more, but also provides greater flexibility and peace of mind 💪.  

Know your needs vs wants  

Distinguishing a clear separation between needs and wants is essential for saving for success. Needs are essential for your well-being, like groceries, medical or housing costs. Wants are desires that can be eliminated without significantly affecting your life. Sometimes, lifestyle creep sneaks in when you start opting for more expensive items, like premium toilet paper, even though what you used before worked perfectly fine. While undoubtedly a household necessity, that extra cost can sometimes blur the line between a need and a want. The key is to recognise this distinction before it’s added to your everyday lifestyle (hence the term, lifestyle creep 😉).  

Automate savings and investments  

Saving money can feel like a challenge at times 🫠. That’s why the most effective approach is to have a consistent savings strategy that allows your money to accumulate and grow. The top method to achieve this is by setting up automatic savings 📲. This takes the pressure off you by transferring funds immediately after receiving your paycheque. When you get a pay rise, consider increasing the amount you are putting away, so you can watch your savings grow even faster than before.   

Avoid impulse purchases  

Impulse purchases are one of the quickest ways to derail your financial plans 💸. When tempted to make large purchases on a whim, give yourself time and review your budget; see if it fits your financial goals and needs. 

Remember, avoiding lifestyle creep is a key step in achieving long-term financial success. By following these four tips, you can take back control over your spending and build a stronger future for yourself. It’s not about depriving yourself of living your best life, but rather about making conscious choices that align with your financial priorities 💜. And if you ever need a top-up, MyPayNow is always in your back pocket 24/7.