Dad, What is Lifestyle Creep?

​What a great question!  I’m glad you asked.

First of all, what picture does the word, creep conjure up in your mind?  Have you ever sneaked up on someone and then scared the daylights out of them?  You were able to get close enough without being detected by creeping up on them? Creep refers to something that is done so surreptitiously that most people would not detect it.  Little by little, it moves along until bam!  It happens.

It happens very slowly, often completely unnoticed, and then, bam!  Disaster strikes.  Lifestyle creep is not the kind of habit that the rich are guilty of.  It is instead a kind of “boom and bust” trait can take you away from your financial freedom and even leave you broke.
Lifestyle creep is in our very nature, so it needs to be recognized and fought.  It’s where you’re living quite comfortably with your income.  You have everything you need, a house, a car, a yearly vacation; then you get a raise or your business really takes off, and suddenly your income goes up.

A lot of people take this as an opportunity to increase their standard of living to match the increase in their income.  This is when people suddenly move into a bigger house, buy high-end automobiles, go on exotic vacations, and so on.  You would not believe how many people who suddenly have a lot more money go to Vegas to live it up and gamble!  It is a very strange paradox that when we become better off we tend to instantly want to do things that will make us worse off.

As I have often said, job security is a myth for anyone, including some of the highest earning executives.  Remember that a collective agreement between your union and the company you work for with a job security clause is only valid until the company shuts down or renegotiates.  There is no such thing as job security!  If your income increases, don’t let lifestyle creep rob you of your gains.

Rich people resist the urge to spend more when they’re making more.  Instead, they put their money into savings and investments that will increase in value and pay them in the future when they need it.  They put off having what they want today in order to have something tomorrow, something called financial independence.

Remember, financial independence is not about having a huge income or being able to buy everything you want whenever you want it.  Financial independence is about having the money you need when you need it to maintain your lifestyle in the comfort you’re used to. 

​Don’t allow lifestyle creep to steal that from you!