The Seductive Trap of the Lifestyle Creep

Table of ContentsView AllTable of ContentsSigns and Effects of Lifestyle CreepCauses of Lifestyle Creep8 Ways to Avoid and Manage Lifestyle Creep

Table of ContentsView All

View All

Table of Contents

Signs and Effects of Lifestyle Creep

Causes of Lifestyle Creep

8 Ways to Avoid and Manage Lifestyle Creep

Congrats—you got a nice salary bump and a better-paying job. Now, you have the extra funds to revamp your home or invest in a new wardrobe. Add another subscription service. Treat yourself to some fine dining events. You deserve these nice little luxuries and plus, money is meant to be spent, right?

Unfortunately, this line of thinking can make you fall for the dreaded “lifestyle creep” trap, aka where you spend frivolously—and without intention—to upgrade your lifestyle.

Everyone deserves the fine things in life and if you can afford it, go ahead! But it’s easy to get carried away binge shopping on Amazon and Target and risking your financial health. That said, there are ways to avoid this sneaky trap—and we lay them all for you below.

How Your Money Affects Your Mental Health

For many, a pay bump is a huge financial relief. But it can also lead to the slippery slope of overspending also known as lifestyle inflation.

She adds that this can lead to stations where people, despite making more money, have little to no savings, living paycheck to paycheck, and feel the burden offinancial stress.

Andrea Woroch, a consumer finance expertLifestyle creep is a hidden financial trap that will keep you from reaching many financial goals, regardless of your income.

Andrea Woroch, a consumer finance expert

Lifestyle creep is a hidden financial trap that will keep you from reaching many financial goals, regardless of your income.

Andrea Woroch, a consumer finance and budgeting expert, says lifestyle creep could look like swapping out your otherwise trusty car for a shiny new one, buying a bigger house (with bigger bills), upgrading your gadgets to the latest devices, or purchasing new clothing when your wardrobe is perfectly fine.

“Lifestyle creep is a hidden financial trap that will keep you from reaching many financial goals regardless of your income," Woroch warns. “After all, it’s not how much you make but how you spend that will impact your financial situation.”

Signs of Lifestyle Creep

Financial Compatibility Is an Understated Relationship Green Flag

There are many reasons why people fall into the lifestyle creep trap from this need to keep up with the Joneses to a lack of impulse control. Here are the most common causes.

Pressure to Keep Up

We often want what others have, or we wantbetterthan what they have.

“One of the biggest areas to blame is theconstant comparison and pressurepeople feel to live like others they see online and through social media,” notes Michelle Winterfield, a couples finance expert and founder of theTandem app. “A big part of partaking in any experience now is thinking about the Instagram post that will follow.”

Michelle Winterfield, couples finance expertOne of the biggest areas to blame is the constant comparison and pressure people feel to live like others they see online and through social media.

Michelle Winterfield, couples finance expert

One of the biggest areas to blame is the constant comparison and pressure people feel to live like others they see online and through social media.

A 2021 study even found a direct relationship between oursocial media use and depressionand discovered that viewing others' highlight reels can often make us feel bad about ourselves and our own accomplishments.

But this pressure isn’t limited to social media. Before the digital boom, people compared themselves to neighbors, friends, and family. Social media only exacerbated this problem and many now compare themselves to millions of strangers on the Internet instead of their inner circle. Hence, why people feel compelled to “over-purchase on things and experiences they may not have if these platforms weren’t so widely used,” says Winterfield.

Undisciplined Budgeting

The more you make, the less likely you feel a budget or examination of your finances is needed. After all, that $5 expense seems negligible, compared to when cash was tighter.

“Consumers often pay close to how much they spend when they are on a limited income, but loosen their purse strings when they get a bigger paycheck and have more money in the bank,” Worch says. “This leads to giving in to moreimpulse purchasesor splurging more often than they may have before.” Cue overspending.

Poor Financial Literacy

Another reason why lifestyle creep occurs is because of poor—or the lack of—financial education.

“Those who don’t understand basic financial principles and how to budget, save, or invest can also end up blowing their hard-earned dollars on wasteful purchases in many situations,” Woroch says. The more you understand about finances, the more likely you are to make savvy decisions to benefit your future self.

A 2022 study found that those with increased financial literacy make wiser decisions that help secure their future financial needs.

Why It’s Harmful to Compare Yourself to Others

Avoiding lifestyle creep is an ongoing battle that requires some self-awareness and discipline. By regularly reviewing and adjusting your financial plan, MacVittie says you can help make sure your spending aligns with your values and long-term goals.

How to Stop Emotional Spending (aka Retail Therapy)

2 SourcesVerywell Mind uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.Taylor-Jackson, J., & Moustafa, A. A. (2021).The relationships between social media use and factors relating to depression.The Nature of Depression, 171–182. https://doi.org/10.1016/B978-0-12-817676-4.00010-9Weinstein A, Maraz A, Griffiths MD, Lejoyeux M, Demetrovics Z. (2016).Compulsive buying—features and characteristics of addiction.In: Neuropathology of Drug Addictions and Substance Misuse. Elsevier; 2016:993-1007. doi:10.1016/B978-0-12-800634-4.00098-6

2 Sources

Verywell Mind uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.Taylor-Jackson, J., & Moustafa, A. A. (2021).The relationships between social media use and factors relating to depression.The Nature of Depression, 171–182. https://doi.org/10.1016/B978-0-12-817676-4.00010-9Weinstein A, Maraz A, Griffiths MD, Lejoyeux M, Demetrovics Z. (2016).Compulsive buying—features and characteristics of addiction.In: Neuropathology of Drug Addictions and Substance Misuse. Elsevier; 2016:993-1007. doi:10.1016/B978-0-12-800634-4.00098-6

Taylor-Jackson, J., & Moustafa, A. A. (2021).The relationships between social media use and factors relating to depression.The Nature of Depression, 171–182. https://doi.org/10.1016/B978-0-12-817676-4.00010-9Weinstein A, Maraz A, Griffiths MD, Lejoyeux M, Demetrovics Z. (2016).Compulsive buying—features and characteristics of addiction.In: Neuropathology of Drug Addictions and Substance Misuse. Elsevier; 2016:993-1007. doi:10.1016/B978-0-12-800634-4.00098-6

Weinstein A, Maraz A, Griffiths MD, Lejoyeux M, Demetrovics Z. (2016).Compulsive buying—features and characteristics of addiction.In: Neuropathology of Drug Addictions and Substance Misuse. Elsevier; 2016:993-1007. doi:10.1016/B978-0-12-800634-4.00098-6

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Andrea Woroch, a consumer finance expert#

Signs of Lifestyle Creep#

Pressure to Keep Up#

Michelle Winterfield, couples finance expert#

Undisciplined Budgeting#

Poor Financial Literacy#