How to Outsmart “Lifestyle Creep”
Let’s talk about leveling up your life, without falling into the trap of lifestyle creep—spending more just because you’re earning more. In this episode, I’m sharing real tips and personal stories to help you stay on track with your goals, make SMART MOVES, and still enjoy life!
What is lifestyle Creep?
Lifestyle creep is the gradual adjustment of one’s lifestyle to match an increasing income. Over time, expenses grow along with earnings, often to the point where saving becomes difficult because higher income leads to proportionately higher spending.
“Your money is something that should constantly be flowing in your life”
How to stick to our financial goals?
1) Be smart
Decide in advance how much of any raise or bonus will go to savings, debt repayment, or investments before adjusting spending habits. For example, allocate 50% of a raise to savings, 30% to goals (like travel), and 20% to splurges.
Even if it's, let's say, 5% of the income that you're getting, even as small as 500 pesos per month, if you set that aside, it's still something at the end of the year. (JP)
2) Prioritize your financial goals
Focus on building an emergency fund, paying off debt, or contributing to retirement accounts. Use extra income to make progress on long-term goals like buying a home or starting a business.
3)Keep your expenses in check
Identify where money is going and cut back on unnecessary upgrades or subscriptions. Resist upgrading homes, cars, or technology unless it aligns with your financial plan. Treat savings like a non-negotiable expense.
How to handle pressure to “upgrade”?
1) Go back to your priorities
Be clear about your financial priorities, like saving for retirement, paying off debt, or investing in experiences that matter to you. Focus on what truly brings you satisfaction, rather than succumbing to societal or peer expectations.
2) Avoid comparison traps
Limit exposure to sources that amplify "keeping up" pressure, such as social media or competitive social circles. Like, don't be afraid to be the weird person that doesn't conform to the idea of what a successful person looks like (JP).
3) Develop non-material hobbies
Find joy in non-material activities, like hobbies, relationships, or learning. Invest in experiences that provide lasting happiness rather than fleeting status symbols. Nice stuff is not a bad thing but it's not the thing that is supposed to identify you as a successful person (JP).
5) Have friends with same goals
Surround yourself with people who respect your choices and share similar financial mindsets. Open up about your goals with close friends or family who can encourage your discipline.
How to balance investing in yourself vs traditional investment?
Recognize the value of Both
Investing in yourself is part of this, including education, skills, health, and experiences that enhance your earning potential, happiness, or personal growth. Like for example, taking a course, improving health, or starting a business, or just by swimming lessons.
Example of long-term Investments:
Buying for yourself
Investing in items that would help you
Invest in a property
Invest in your good friends
Buy it nice or buy it twice. You know you buy something that's really nice you don't have to buy it twice. (JP)
Encouragements to those who are starting to save:
1) You’ll learn as you go
Time to read some books that will benefit the growth and give knowledgeable insights to add value for the future that is worth the go.
2) Have an emergency fund
Before investing, ensure you have 3–6 months of living expenses saved in a liquid, easily accessible account.
3) You can start small, just be consistent
Invest a manageable amount regularly that can help the money now, grow later on. Focus on building a diversified portfolio over time.
4) Invest in tangible
Property investments, such as residential homes, commercial buildings, or land. Because it generates rental income, appreciates in value, and can serve as a physical asset that can be useful in the future.
How to reward yourself without feeling guilty?
1) Recognize the importance of rewards
Of course it's good to enjoy the fruit of our labor, but at the same time we have to be more mindful of these things. We don't know what is in store in the future so at least we’re prepared. (JP)
2) Plan your rewards in advance
Decide how and when you’ll reward yourself to avoid impulsive spending. Example, it has to be allocated wisely like having a percentage of a bonus or raise for a treat. Set aside a small, guilt-free portion of your income for discretionary spending. (JP)
3) Avoid overindulgence
Keep rewards proportional to the achievement meaning celebrate small wins with a coffee date, and, reserve bigger rewards for major milestones.
Money Classifications:
Emergency Fund - your monthly expenses save up 3-6 months. If there’s spent amounting on 10,000 per month it should have 30,00 - 60,00 save up for emergency funds (JP)
Fun Money -This fund doesn’t need a specific purpose—it’s just there so we have something to spend from guilt-free when we want to enjoy or splurge a little. It’s our "fun money."(JP).
Retirement / Savings Account - This is the money we have started saving even in your 20's. (JP)
Investment Money - The money we save eventually; re-invest in the future. Whether that's property, rental property, stocks. Save up for those things and set things aside (JP)
Tithing - Money I give to charity / 10% to church. Your money is something that should constantly be flowing in your life, is not something that you only hold onto. It's something you freely give away to those who might need it more (JP).
At the end of the day, boundaries are there to protect you. You don’t have to constantly restrict yourself—just know what your priorities are. Strive to live simply and fully, while making sure we understand what truly matters (JP).
“Our money isn’t just for us—it’s for helping others, for showing love, and for being a blessing to those in need. The money we earn is a channel of blessings from God.”