Your Friends' Spending Isn't Your Budget: How To Stop Lifestyle Creep Early
We've all likely been guilty of lifestyle creep, where your spending increases as your income does. And sometimes, the temptation to spend more actually comes from the people around you.
When we see our friends on social media upgrading to a luxury apartment, suddenly your perfectly fine apartment feels too small. Someone you follow on Instagram is always on vacation, so now your weekend coffee run somehow turns into a luxury trip to Greece.
Get Started: 3 Money Rules for Beginners That Actually Add Up to Real Wealth
Also Check Out: 9 Subtly Genius Things All Wealthy People Do With Their Money — That You Should Do, Too
The problem is that your friends' spending habits are not your financial plan. Just because someone else can afford something doesn’t mean it makes sense for your life or money goals.
Here’s how you stop letting your friends’ lifestyle affect your financial decisions.
Know What You Actually Want
Some people fall into lifestyle creep because they don’t actually know what they want. They spend money to live a life that looks good to others, without even thinking about whether that lifestyle truly feels good to themselves.
For example, if you don’t actually care about designer brands or flying first class, but still spend money on those things just because your friends are, then you’re essentially wasting money. That’s why it’s important to get clear on what you actually want. Maybe your ideal life looks more like having flexible work hours or learning a new hobby.
When you know what you’re working toward and what matters to you, it's much easier to say no to things that don’t actually improve your life.
Stop Increasing Your Lifestyle With Every Raise
It's natural to want to treat yourself after working hard to make that money. But where it becomes problematic is when the increase in lifestyle outpaces how fast your income is growing. What’s even more problematic is if you’re increasing your lifestyle because of societal pressure and not because those upgrades genuinely add value to your life.
To avoid lifestyle creep, create a system so that you pay yourself first when your paycheck hits your bank account. For example, if you get a $500 monthly raise, decide ahead of time that a portion of it will go directly toward your high-yield savings account or investments. Then, what’s left can be used for fun spending.
Curate Who You Surround Yourself With
The people around you can heavily influence your financial habits, even if you don’t realize it.
If your social circle loves to spend money on expensive dinners, luxury trips or designer brands, it’s easy to normalize overspending. Social media can also make this even more extreme because you’re constantly exposed to highlight reels of people appearing richer than they actually are. What you don’t see is the credit card statements and financing plans behind many of those purchases.
So if you’re someone who’s easily influenced by peers, you may want to create some distance from content or environments that could trigger comparison spending. For example, by muting certain people on social media.
Normalize Cheaper Fun
You don’t have to spend a ton of money every time you hang out with your friends. There are many lower-cost activities that are just as fun as $200 bunches, such as the following.
Movie nights at home
Picnics
Hikes
Free local events
Game nights
At the end of the day, your friendships shouldn’t depend on how much money you’re spending. What matters most is the quality of the connection and the fact that you’re spending time together.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
More From MoneyLion: