Lifestyle Creep of a Millennial
Lifestyle Creep of a Millennial | Rowan Woolsey, Copy House Urchin
Millennials are still dealing with the fallout of the economic bait and switch we fell victim to after college. Most of us rent our homes instead of buying, are subjugated by student loan debt, and working more than one job to make ends meet. But over time, some of us have found slightly better-paying jobs and a little more breathing room in the budget.
As you move up the ranks in your career and start earning more money, you may be persuaded to buy the things you’ve always wanted. But doing so is a booby-trap and it can land you right back where you were— putting $10 in the tank so you can afford a few box dinners. Here is my story of lifestyle creep, how I caught myself slipping further away from my financial goals, and how I’m currently course correcting.
How I Fell Into Lifestyle Creep
Lifestyle creep is the concept that as your paychecks grow, so do your expenses. Instead of your financial situation improving with promotions and raises, your spending also accelerates, keeping you living paycheck to paycheck.
In the last three years, I’ve been able to earn pay increases that released the stranglehold money had on my life. I still earn a modest income, but I’ve noticed how not stressed I am when grocery shopping or picking out a new sweater.
That’s how it started. We began spending more because we had it. We bought things we needed and could now afford: new plates, a vacuum, pizza on Friday nights.
Nothing fancy, just more stuff. We used to scrape by and now we didn’t.
But when the pandemic sent me home on furlough, all of a sudden, I realized that we didn’t have a handle on what was coming in and going out. Our financial paperwork was just a running balance sheet on white copy paper. We had several auto-pay subscriptions, our take-out bill could have paid for a week’s worth of groceries, and I had clothes I never wore.
There it was. My own personal lifestyle creep.
Course Correcting My Lifestyle Creep
To some standards, I still wasn’t spending heaps. I still kept monthly expenses under $3,000 and we didn’t have mountains of credit card debt… But we did have more credit cards than we used to, subscription costs we barely noticed, and still no savings or retirement accounts.
That was when I knew I needed to approach finances differently. Now that I was able to make choices about my money, it was my obligation to do better.
I started by educating myself about money. I wish they taught this stuff in school — it’s kind of a basic life skill, but what do I know? I dove into YouTube and learned about retirement, investing, stocks, fintech, 401Ks, the list goes on. As I learned, I realized how interesting this all was and I think I found a new hobby.
Then I opened a Google Sheet and rejoiced that there was a budget template included. I coaxed my husband to use the digital form instead of his preferred copy paper method. While the guy doesn’t love change, he adopted this one pretty easily. Now we can both see our transactions by category, plan the budget, and track our income… a huge step up in bookkeeping.
There are still systems I want to implement. For example, our Google Sheet doesn’t account for our credit card spending or debt. But, it’s a start.
The next thing I did was finally start an emergency fund, retirement account, and investment portfolio. These are all works in progress, but I’m on track with my goal.
So for you skimmers:
Learn about money (YouTube / Google)
Better bookkeeping
Start an emergency fund and (if you can) a savings account.
PRO TIP: Fund your emergency account first because if you experience an emergency without it, you’ll have to dip into whatever savings or investments you have made.
My Millennial Approach to Money
Getting my spending under control and setting up my various accounts has given me a lot of confidence. I feel like I’m on the right track.
But the bottom line is I’m allowing a little lifestyle creep. On purpose.
I’m all of a sudden (not so suddenly) that girl with the three identical gray cardigans. While that’s something I should be aware of, I don’t believe I need to keep my expenses at desperate levels just to bank the more for retirement. I’m happy to give myself a little more leeway with the monthly budget and keep an eye on the rest knowing that I’m moving in the right direction.
Conclusion
Awareness and education are a perfect starting point to a better handle on your finances. Starting with a basic audit of your bank account can reveal some hidden spending habits and set you on the path to fix them.
Leverage free resources like YouTube and Google to create some tools that will help you manage your money better. I even like to create vision boards in Canva to help inspire me towards my goals. It might be nerdy, but I like dropping fifty bucks on my robo-investment app more than a trendy top these days.
How are you going to start to heal your relationship with money? Self-education, vision planning, or jumping into a tool? Let me know in the comments.