Avoid Lifestyle Inflation, Especially While in Debt

When my husband and I were just beginning our married life, we lived on very little. And I do mean very little! He had a job at a local radio station, and it didn’t pay much. I was a stay at home mom with no income.

We got by, and we had everything we needed, but we had a bad case of lifestyle envy. It seemed everyone else had more. More toys, better clothes, a home of their own. Meanwhile, we drove old cars, lived in a tiny single wide, and were busy paying off student loan and credit card debt.

Five years and another child later, we moved to a bigger city, where my husband landed a sales position at our local newspaper. The economy was booming, and we saw our income increase quite a bit.

If I had been a Dave Ramsey fan back then, we would have continued our modest lifestyle and paid off our debt quickly. Unfortunately, after living on such a tight budget for so long, we did what most people do. We spent more.

We were finally able to buy brand new clothes for our kids, instead of shopping the thrift stores. We took some fun vacations. We went out to eat more often. And our debt lingered.

The funny thing is, even though we were buying more, we still weren’t satisfied. There were still people out there with better cars, bigger houses, and more toys. Probably more debt, too.

We finally got our heads together and decided to cut back on our lifestyle again so we could pay off our credit cards. Unfortunately, that’s when the economy turned, and my husband lost his good paying job. He landed on his feet with another job, though it paid considerably less.

Still, it was a good job, and we were able to tighten our budget enough to pay off our credit card debt. Had we been smart from the beginning, though, our debt would have been long gone before my husband’s job loss.

The moral of the story is that someone will always have more than you. It’s best to focus on your own financial goals and avoid the lifestyle inflation that will prevent you from meeting those goals. Learning to be content in all circumstances is the best path to financial freedom.

3 Tips to Help You Avoid Lifestyle Inflation

So what can you do to avoid lifestyle inflation?

Use a Budget

Our biggest downfall during my husband’s income boom was that we didn’t have a zero based budget. If we felt like eating out, we ate out, even if we’d already spent $100 that month on restaurant meals.

By making and using a budget, we would have been more aware of how much we were spending on frivolous things. Just seeing the numbers in black and white would have made us think twice about some of our spending decisions.

Ignore the Joneses

Like I said before, someone will always have more than you do. The thing is, you don’t know how much debt they’ve acquired in order to buy their possessions.

Be happy for your neighbor’s success, but realize that you have your own goals. By keeping your eyes on your own situation, you can work on your own problems. It’s when you start paying attention to what everyone else has that you fall prey to discontentment, and envy is a catalyst for bad spending decisions.

Stay Focused

If your goal is to pay off debt, stay focused on that goal. Listen to Dave Ramsey, read books on good financial practices, or display a chart of your progress toward paying off your debt. Do whatever it takes to motivate you to meet your goals.

Just one big splurge can cause you to veer way off your debt repayment path. Stay focused on your goal.

I’ve done the lifestyle inflation thing while still in debt. Learn from my mistakes. Living large while you’re in debt isn’t as much fun as it seems.

What did you do the last time you got a raise or a higher paying job? Did you find your lifestyle inflating, or did you manage to keep control of your budget? Do you have any tips for avoiding lifestyle inflation?

Photo by javajoba.



Author

By , on May 30, 2012
Lynnae McCoy I'm Lynnae, wife of one and stay-at-home mom of two. I'm committed to getting out of debt by being frugal with my choices in life.

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{2 Comments}

  1. Rye:

    Exactly. We all get a bad case of envy sometimes. But it’s really just a fleeting feeling especially if the thing we are jealous about isn’t really something we need. Besides, we can always have frugal fun. It may require a little creativity and imagination but it can create worthwhile memories.

  2. Christine:

    Every time my husband gets a raise, he increases (slightly) the automatic deductions we make to RESPs and other savings vehicles. As a result, we never notice going without the several hundred dollars a month that are being saved. As a result, we have very little owing on our mortgage and no other debt.

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