Lifestyle creep can ruin home buying plans

Lifestyle Creep and priorities - house keys and dollar cash floating around gift bags and credit card

Lifestyle creep was a new phrase to me not long ago, but I understood the meaning right away: giving oneself a lifestyle upgrade with pay increases or milestones achieved.

What does lifestyle creep look like?

When life improves, particularly if more money is coming in, a somewhat natural inclination may be to spend a little more of it on oneself and splurges – things not previously affordable. Here are a few examples:

  • just got a new job
    • buy a new wardrobe, maybe even designer items “because I deserve it”
  • graduated from school, university, or graduate program
    • take an expensive vacation, maybe lasting all summer, to celebrate
  • just got engaged, married, or grew the family
    • buy or lease a new (or new to you) expensive vehicle
    • move to a much larger rental home

More meals out, more Uber Eats, a new car or new rental digs can all feel like well deserved rewards with the better income, combined households, or achievements made. But do they address your long term goals, or put those goals more out of reach?

What we want now versus what we want most

Lifestyle creep can be a threat to hitting long term, important goals which take cash. Whether the big plan is to pay off student loans, save for a down payment on a first or move-up home, or save for a loved one’s higher education, cash is king. If that cash is spent on little indulgences on a regular basis, it can erode the ability to do what is wanted the most.