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Ways To Stop Lifestyle Creep From Entirely Ruining Your Retirement

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You are in a comfortable spot in life financially. Perhaps that comfort leads you to take a few risks like checking out a larger home. Or you might be willing to trade in your three-month-old ride for something twice as pricey.

If this sounds like you, you might have suffered from lifestyle creep.

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Suddenly, there is a large amount of money in your checking and savings, your bank accounts having a few more zeros. Spending money left and right may be fun in the short term, you may be chipping away at your retirement. Here are a few ways you can save those retirement accounts from lifestyle creep:

1. Spend some – but not all – of your raise or bonus

It’s relatively normal to want to spend your bonus when it finally arrives. While you can spend the money as you see fit, spending without thought might cost you thousands of dollars in future.

If you plan on spending regardless, do so carefully. For example, if you’ve got a bonus of $2000, take $300 and go nuts. Put the rest of your money toward investment opportunities.

Treating your money this way can help you avoid lifestyle creep and yield you a substantial reward.

2. Value Experiences over Things

When it comes to material possession, the experience is valued far more than the objects gathered in one’s lifetime. Don’t let lifestyle creep control your spending habits.

Nix those plans to renovate the garage into man-cave and don’t make any plans for landscaping the entire backyard. Instead, take the time to bond with your friends and family, inviting over or visiting for dinner, hosting birthday parties, etc.

Look for meaningful things to experience with friends and family, as long as it doesn’t sap your funds. Take your child to see that movie they’ve been asking about. Or you can take your parent to a local museum or free wine tasting event. You’ll save your money and create strong bonds and memories with loved ones.

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3. Cut Back on Social Media Use

Social media is not only emotionally draining, but can at times be financially draining as well. A study by a US/Canadian research team discovered a correlation between social media use and increased consumption.

The study stated, “a posting about a consumption event triggers a notification to friends; a non-posting about not engaging in a consumption event does not.”
Getting away from the influence of social media and unplugging completely can be emotionally relaxing. Get out and bird watch or try to sketch the random animals you see around the local park.

Whatever activity you choose, remember to keep the social media use to a little as you can possibly manage. You’ll thank yourself for it later.

4. Take on a Side Gig

Spending is sometimes motivated by the way others burn their cash. Other times, the motivation is simply that you’ve adopted the philosophy “you have to spend if you really want to feel alive.”

If you want to let lifestyle creep become part of your life, give yourself a buffer with a side hustle or possibly a part-time job. You’ll have enough cash for your bills that some pocket change may be left over.

As MSN Money states, “There are all sorts of other gigs with money-making potential emerging – strange tasks that may never have crossed your mind.”

5. Keep your eyes fixed on Father Time

Before you ever turn twenty, you feel like you have all the time in the world. It feels like old age is eons away. As time progresses and you age further, that old age begins to skirt dangerously closer to reality.

Once you turn 35 or older, it’s time to consider how your finances will look once you retire. Keep your eyes on that retirement account and make sure to put money into it.

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A survey in 2018 had an almost unanimous agreement to set aside 31 percent of a check, among those who thought about their life in their 60s, 70s, and 80s.

Lifestyle creep can be damaging to your retirement if you allow it to be. Take charge as the adult you are, and make sure to save for your future retirement. Don’t let lifestyle creep get ahold of you and ruin the relaxing future you envisioned after leaving the workforce.

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