Living Well vs. Lifestyle Creep

The battery life is waning on my MacBook Air. Is it time for a new MacBook Pro? 

Do I need that new LL Bean winter coat? Or do I just want it? And does it really matter?

Ladies and gentlemen, let me introduce my good friend and yours...Lifestyle Creep!

While you’ll likely find lifestyle creep listed in the dictionary under “first world problems,” it’s a slippery slope between unnecessary frugality and spending every dollar you make. The struggle can be even more difficult around the holiday season when our inboxes are flooded with new deals every single hour.

How do we live well while avoiding the trap of lifestyle creep? Here are three methods that have helped me.

1. Match your splurge with savings

Nick Maggiulli of Dollars and Data shared this method on Twitter recently:

"Anytime I splurge on something I take the same amount of money and invest it.  So if I want to buy a $400 pair of shoes, I ALSO have to buy $400 worth of stocks. Makes you reevaluate how much you really want something since you have to save 2x for it."

I love the simplicity of this approach. It’s a helpful reframe and if you find yourself struggling to save enough, this could be a good method to try.

2. Implement the 48 hour rule

Isn’t it great that we can order something and have it delivered to our doorstep in as little as two hours? Unfortunately this level of convenience comes with drawbacks as it can feed our spending impulses. And yes, I’m looking at you Amazon and your delightful one-click-to-buy button.

I first heard about the 48 hour rule from Carl at Behavior Gap awhile back. Here’s how it works:

If you see something you want, put it in your online shopping cart and leave it there for 48 hours. If you still want and/or need it after 48 hours, go ahead and buy it knowing you’ve really thought about it and it’s not just an impulse buy.

Speaking from personal experience, the purchases I’ve made using this method have been much more fulfilling than the ones where I didn’t wait.

3. Pay yourself first, spend the rest

Mental accounting can become a losing battle as the numbers get bigger and life gets more complicated. You can make this battle much easier by paying yourself first.

That annual bonus that’s due to pay out early next year? Automate a percentage to go directly to your 401k and then transfer a set dollar amount directly into your emergency savings. Once that’s done, you can book that family spring break trip without feeling guilty about it.

We can get ourselves in trouble when we try to save AFTER we spend, so try flipping the process. Pay yourself first, then spend the rest.

As for me, it turns out the LL Bean winter jacket passed the 48 hour rule and will be arriving on my doorstep next week. And after reviewing our retirement and savings goals and realizing we’ve already funded them for the year, I think I will upgrade from my five-year-old MacBook Air.

See? We can still have nice things! As long as we use a few methods to make smarter decisions and keep lifestyle creep in check.

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