How To Avoid Lifestyle Creep (7 Ways To Take Control of Your Finances)

Last Updated October 27, 2024 by Davina Kelly

Do you want to learn how to avoid lifestyle creep? 

Lifestyle creep is one of those sneaky things that can slip into your financial life without you realising it. One day, you’re celebrating a raise or bonus and the next your spending has now grown to match your income. It’s a trap that many people fall into (myself included).

In this post, you’re going to learn exactly what lifestyle creep is, why it’s so damaging and most importantly, how to avoid lifestyle creep. 

After reading this post, you’ll know practical strategies to keep your spending in check while still enjoying the fruits of your labour. 

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What is Lifestyle Creep?

Lifestyle creep happens when your spending starts to increase as your income grows. You go from making $60k to $80k, then suddenly, you’re moving into a nicer home and upgrading all your furniture.

Next thing you know, you’re driving a more expensive car and ordering at restaurants without even looking at the prices—telling yourself you deserve it because you’re earning more. 

And it’s true, you do deserve nice things and who doesn’t want to enjoy their money? But it’s a slippery slope that can seriously damage your finances if you’re not careful. 

Before you know it, the lifestyle upgrades pile up and suddenly that raise you were so excited about gets eaten up by higher expenses. 

I know this all too well because I’ve been there. When I first started making more money, I let my spending rise right along with it. I told myself, “I’ve worked hard, I deserve to treat myself.” But before I knew it, I was trapped in payday loan debt for two years.

Even though I was earning more, I was still living paycheck to paycheck, with nothing saved. It wasn’t until I faced the reality of my choices that I was able to cut back, pay off my debt, and start putting extra income toward my goals instead of wasting it on more spending.

Signs of Lifestyle Creep

The first step in how to avoid lifestyle creep is to recognise it when it starts to happen. Here are some telltale signs you’re falling into the trap.

Your expenses have increased in proportion to your income: If every time you get a raise or make some extra cash your spending seems to grow along with it, that’s a red flag. 

You’re still living paycheck to paycheck: Despite earning more, if you find yourself with little to no money left at the end of the month, it’s time to reassess where your money is going. 

Your saving rate hasn’t improved: You’re making more but your savings aren’t increasing. This is a major sign that lifestyle creep is eating away at your financial progress. 

You’re justifying new purchases as “one-time splurges”: If those “one-time” purchases are happening regularly, they’re not so one-time anymore. 

If any of these sound familiar don’t panic! The good news is, you can still take control and avoid lifestyle creep moving forward. 

How To Avoid Lifestyle Creep:

Areas To Watch Your Spending

Lifestyle creep often sneaks up on us in small, subtle ways, especially in areas where we don’t even realise we’re overspending. Let’s get into some key areas where it’s easy to let spending get out of control and learn how to be more mindful of your choices.

1. Housing

Housing is typically the biggest expense in most people’s budget and it’s one of the first places where lifestyle creep can begin. Just because you can afford to upgrade to a fancier apartment or house doesn’t mean you should. 

If you’re currently living in an unsafe environment, then sure, upgrading makes sense. Your home should be a place where you feel comfortable and secure. But if your current housing is fine and meets your needs, think twice before upgrading. 

Remember, every extra dollar you spend on a bigger nicer home is a dollar that could’ve gone toward building your retirement fund or investing. 

You get used to living a more expensive lifestyle and that means you’ll need more money to maintain it when you retire. Be aware of the trade-off – upgrading your housing could push your retirement further away. 

2. Cars

Next to housing, cars are often the second biggest area where people tend to overspend. Let’s be real – cars are often seen as status symbols, but who really cares about status? 

A fancy car won’t pay your bills or help you reach your financial goals. Building a nest egg that allows you to live life on your terms is way more important.  

When you get a raise, resist the urge to run out and buy a new car. Instead, consider investing that money to build wealth. Cars are depreciating assets – they lose value the minute you drive them off the lot. Your car just needs to get you from point A to point B.

Take a note from Warren Buffet, one of the richest men in the world – he still drives a modest car and doesn’t have a driveway full of luxury vehicles. The lesson here? Master the art of making more money without spending more and use that difference to grow your wealth. 

3. Convenience

It’s so easy to get comfortable with conveniences, especially when it comes to ordering takeout or delivery. But here’s the thing – while it’s fine occasionally, it can’t become the norm. 

Trust me, I totally get it—takeaways are my guilty pleasure too! I used to spend over $80 a month on takeout, so I knew I had to make a change. 

Now, I plan my meals and cook at home, but I still treat myself to one takeaway per week, and I make sure to include it in my budget. That way I’m not overspending and I don’t feel deprived.

Ordering takeaways can easily become an expensive habit. Instead, try meal prepping—it saves both time and money. 

If cooking or meal planning isn’t your thing, I highly recommend the $5 Meal Plan. It’s a super affordable service that sends delicious meal plans straight to your inbox every week for just $5 a month. 

Plus, each meal costs only $2–$3 per person! So you’ll be saving money and eating nutritious meals. 

You can try it out FREE for 14 days here. Check it out and see if you like it. 

4. Subscriptions

Subscriptions are the silent budget killers. It’s so easy to sign up for a service and forget about it then realise months later that you’re still being charged for something you barely use. I am definitely guilty of this. 

Here’s what I used to pay for monthly:

• YouTube Premium: $11.99
• Gym Membership: $49.99
• Amazon Prime: $8.99
• Disney+: $7.99
• Netflix: $11.99
• Spotify: $10.99
• Audible: $7.99

Now, I’ve cut back to only paying for the services I truly use:

• Amazon Prime: Paid for the year in full and saved $13.
• Netflix: Downgraded to the $4.99 plan with ads—honestly, ads won’t kill me.
• Spotify: Still at $10.99, but I also have access to audiobooks.

If you don’t regularly check your budget, these little charges can add up fast. Only pay for subscriptions that genuinely add value to your life. 

5. Clothes

Clothes are a fun way to express yourself and  I completely get it. I used to feel the need to keep up with the latest fashion trends, especially when I was around people who made more money than me. 

But here’s the truth: trends come and go and constantly shopping to keep up can drain your finances. 

Nowadays, I stick to the basics – high-quality pieces that last and can be easily mixed and matched. Since I mainly work from home, I don’t need a fancy wardrobe. 

Adjust your wardrobe to fit your lifestyle. Before you buy something, ask yourself, “Do I really need this, or am I buying it just because I can?” 

6. Services

I’m all for pampering yourself, but it’s easy for things like getting your hair and nails done or outsourcing tasks to become part of your new normal. Once something becomes a regular part of your routine, it can be hard to cut back. 

Be mindful of what services you’re paying for and only keep the ones that truly add value. For example, do you really need to get your hair and nails done every month? Maybe you can continue getting your nails done but start doing your hair yourself or go to the salon less often. 

You don’t have to give up everything you enjoy—just find smarter, more budget-friendly ways to do it.

While you absolutely deserve to treat yourself and enjoy nice things, you also deserve financial security and freedom. 

The more you spend on services the more likely you are to continue trading your time for money and living paycheck to paycheck. Be careful not to let luxuries become necessities. 

Strategies to Avoid Lifestyle Creep

Now that you know which areas of your spending to pay attention to, let’s talk about strategies on how to avoid lifestyle creep. Here are some practical steps you can start implementing today. 

Create or Stick to a Budget

I know I know – budgeting doesn’t sound like fun. But trust me, it’s a lifesaver when it comes to keeping your spending in check. Even if you’re making more money, you still need a plan for where that money is going. 

You can use simple budgeting methods like the 50/30/20 rule (50% of income for needs, 30% for wants and 20% for savings) or zero-based budgeting (where every dollar is accounted for). The key is to make sure your budget reflects your priorities and helps you stay on track. 

Related: The 7 Best Budgeting Methods to Master Your Money 

Prioritise Financial Goals First

One of the biggest lessons I learned through my journey was the importance of paying myself first. This helped me save my first $50,000. 

Before you start spending your new income, set aside money for financial goals – whether that’s saving for an emergency fund, investing or paying off debt. 

Automating these transfers makes it even easier. Have a portion of your paycheck automatically go into your savings or retirement account before you have the chance to spend it. This way, you’re building wealth without even thinking about it. 

Set Clear Financial Milestones

When you don’t have a goal it’s easy to let your money slip away on impulse buys. Setting clear, tangible financial milestones can keep you motivated and focused.

Whether it’s saving $10k in a year or paying off a credit card a goal gives your money a purpose. 

Maintain Your Current Lifestyle

Just because you’re making more money, doesn’t mean you need to drastically change your lifestyle. One of the simplest ways to avoid lifestyle creep is to live like you’re still earning your old salary, at least for a little while. 

Sure, it’s ok to treat yourself, but try to keep most of your spending habits the same.  

Be Conscious of “One-Time” Purchases

Those little splurges might not seem like a big deal at the time, but they can add up fast. If you’re finding yourself justifying purchases as “one-time” treats, stop and think about whether they’re really necessary. 

A great way to stop impulse spending is to implement the 30-day rule: if you see something you want to buy, wait 30 days before making the purchase. This gives you time to cool off and see if you still want it after the initial excitement wears off. 

Distinguish Between Needs and Wants

This sounds simple, but it’s easy to blur the lines between what you need and what you want when you’ve got more money in your pocket. 

One of the best ways to avoid lifestyle creep is to carefully assess each purchase. Ask yourself “Do I really need this, or is it just something I want right now?” 

Cutting back on wants doesn’t mean cutting out all the fun. It’s about finding a balance between enjoying your money and staying on top of your financial goals. 

Focus on What Brings You Joy

When you’re thinking about spending money, focus on experiences or purchases that will bring you lasting happiness rather than short-term gratification. 

For me, investing in my education and health has brought me way more value than buying the latest gadget. 

How to Enjoy Your Income Without Falling Into Lifestyle Creep

Let’s be clear: avoiding lifestyle creep doesn’t mean you can’t enjoy your money. You’ve worked hard for it! It’s ok to spend on things that genuinely add value to your life. 

The key is to do it in a way that aligns with your financial goals. Here’s how:

Reward Yourself, But Set Limits

It’s perfectly fine to treat yourself when you hit a milestone or achieve something significant. Just make sure to set limits on how much you’ll spend and stick to it.

For example, instead of upgrading to a luxury car, treat yourself to a weekend getaway. It’s about finding small, meaningful ways to enjoy your success without breaking the bank. 

Upgrade in Moderation

If you’re going to upgrade your lifestyle, do it in moderation. Instead of completely overhauling your spending, pick one or two areas you really care about. 

Maybe that’s investing in high-quality kitchen gear because you love to cook or maybe it’s saving for an annual vacation. Once you’ve chosen the area you want to spend on, keep the rest of your spending habits the same.

Final Thoughts on How To Avoid Lifestyle Creep

Lifestyle creep can silently ruin your finances if you’re not careful. But with the right mindset and strategies, you can take control of your money. 

Remember it’s not about depriving yourself of enjoying your hard-earned money. It’s about being mindful of your spending and thinking long-term.

What are some things you do to avoid lifestyle creep? Let me know in the comments below. 

This post was all about how to avoid lifestyle creep.

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