Mastering the Art of Defeating Lifestyle Creep: Rajiv Sabharwal’s Insights on LinkedIn

How to Outsmart the ‘Lifestyle Creep’

In today’s world of instant satisfaction, alongside the pizza and cake that arrive in a flash, there’s one uninvited and stealthy intruder creeping into our lives: Lifestyle Creep. This phrase signifies ‘Lifestyle inflation’, which happens when increasing income does not convert into higher savings.
You can recognize that you are falling victim to this Lifestyle Creep when you catch yourself indulging excessively in pricey wellness items, purchasing a luxury SUV merely because it’s within your budget, or escalating your EMI to lease an upscale condo despite having a perfectly adequate current residence. Your credit card bills will start to pile up and scaling back one’s lifestyle becomes quite tough at this juncture. So, don’t allow the Lifestyle Creep to sneak up on you!

Here are some straightforward strategies to help you stay safe.
·         Save firstly, then spend: When you receive a raise, take time to consult with your financial advisor and allocate funds for paying off debt, boosting investments, and enhancing your retirement savings.
·         Spend wisely: Keep in mind that certain costs are one-time while others recur. Buying new furniture is a one-time purchase, but acquiring a new home will result in higher rent or elevated EMI each month.
·         Acknowledge impermanence: Money flows and ebbs, but changes to your lifestyle can be difficult to relinquish should your income decrease. So, opt for a train ride occasionally for a vacation; flying isn’t mandatory.
·         Prioritize experiences over possessions: Fulfillment isn’t solely dependent on affluence. Surround yourself with friends who can provide meaningful experiences. Schedule simple outings (a stroll, playing indoor games, or watching a film) with them.

While being cautious with expenses is essential, avoid adopting a ‘scarcity mindset’ and refrain from being overly frugal. Relish your newfound wealth on items you cherish. Just establish some ‘guidelines’ on your spending habits and don’t swing too far in either direction. This will help you keep the Lifestyle Creep at bay.