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I\u2019ve spent a lot of time recently thinking about the phenomenon of lifestyle creep<\/strong>.<\/p>\n Even if you don\u2019t know what lifestyle creep is, I can almost guarantee you\u2019ve experienced it to some degree. It\u2019s that sneaky thing that happens when you start to make more money and \u2013 suddenly \u2013 you begin to spend more, too. It\u2019s the sensation responsible for the fact that, despite making 10%, 20%, maybe even 30% more than you did when you began working, you still may only be saving the same amount as (or less than) when you started. <\/p>\n I heard a fascinating explanation for why we do this:<\/p>\n When our lives consist of commuting to work, sitting in a cubicle for 9 hours a day, paying bills, and feeling stressed, we need something (anything!) tangible to prove to ourselves that life isn\u2019t just work and paying bills. Essentially, we\u2019re trying to buy relief from the \u201cnormal\u201d lifestyle.<\/p>\n<\/blockquote>\n So what\u2019s the problem? Maybe the better question is, why is this \u201cnormal,\u201d and why do we accept it as such?<\/p>\n The vicious cycle begins when we suddenly need<\/em> to keep working in order to support the lifestyles we\u2019ve created.<\/p>\n I\u2019ve found that people tend to make much better decisions when they understand what their options are, so I intend to lay them out clearly here.<\/p>\n Minimalism is a philosophy that says we can live better lives with less stuff \u2013 in fact, that the stuff<\/strong> is what\u2019s making us actively unhappy<\/strong>. That\u2019s an oversimplification, sure, but there\u2019s enough research out there to prove, without much doubt, that the feeling of wanting<\/em> creates dissatisfaction.<\/p>\n I think we\u2019re going about it all wrong \u2013 rather than working our entire lives to buy ourselves shiny trinkets along the way to distract ourselves from the fact that we aren\u2019t fulfilled, wouldn\u2019t it be more efficient to (a) decondition our obsession with buying new stuff and (b) save efficiently so we can stop working a few decades earlier and spend our time pursuing purpose instead?<\/p>\n Because here\u2019s the kicker: The stuff isn\u2019t making us happy anyway! The current \u201cnormal\u201d approach we have (in the U.S., anyway) isn\u2019t really<\/em> working, is it? We\u2019ve never had a collective higher standard of living or more money to spend, and yet our happiness has been steadily trending downward (if you\u2019re interested in this research, watch Minimalism on Netflix). Why? Because advertisers (whose sole incentive is to sell us more shit) run the companies that run us. <\/p>\n I can\u2019t even type this without sneering at how idealistic it sounds, so to diffuse the fairy dust vibe, I\u2019m going to turn to my favorite tool: math.<\/p>\n My take on minimalism is this: Money can buy happiness, to some degree, if you know how to spend it. <\/p>\n When I first started consulting with personal finance clients, I had a super laissez-faire approach to people\u2019s spending habits. I didn\u2019t want to touch it with a ten-foot stick, because I knew that, at best, people wouldn\u2019t listen, and at its worst, it would be offensive and judgmental \u2013 so I\u2019d avoid making suggestions, for the most part, even when it was clear someone wasn\u2019t happy or fulfilled by the way they were spending.<\/p>\n But here\u2019s the thing: We, generally speaking, don\u2019t know how<\/em> to spend our money in a way that makes us happy! <\/strong>That\u2019s why so many of us become frustrated and dissatisfied with our lives and finances.<\/p>\n If we use money to feel secure, experience new things, and share our wealth with others, money will buy happiness.<\/p>\n I consider myself a reformed materialist because I truly<\/em> used to feel like I was on a hamster wheel. When I was at Alabama, girls had Range Rovers and Cartier bracelets and Louis Vuitton bags and David Yurman rings and \u2013 AND \u2013 I couldn\u2019t keep up. The birthday and Christmas present strategy I attempted to employ with my parents to acquire designer things twice a year simply didn\u2019t cut it, and I felt constantly behind and inadequate. The sorority system at Alabama was simply composed of a slice of wealth that I didn\u2019t really belong in, and I felt it.<\/p>\n Shortly after I moved to Dallas and was removed from the petri dish of upper class flash (and working in an office setting with normal, middle class people), I noticed the pressure dissipated. When I wasn\u2019t surrounded by $2,000 accessories every day, it stopped feeling like something I needed<\/em> to fit in. <\/p>\n But my first few months in Dallas were a detox period that still cost me: Even when I was making the least amount of money I\u2019ve ever made professionally, I\u2019m pretty confident I was spending more than I\u2019m spending now, and by a large margin. <\/p>\n When I sat down and calculated how much I was spending on variable discretionary categories, I was clocking in around $700 on Bars & Restaurants and about $400 per month on Shopping. $350 on \u201cpersonal care,\u201d which at the time was how I justified eyelash extensions and manicures. <\/p>\n Essentially, I had approx. $1,500 going down the drain monthly \u2013 and I wasn\u2019t happy. <\/p>\n And you know what? There\u2019s something incredibly liberating about deciding that\u2019s just not who you are. That\u2019s they key: It\u2019s the identity<\/em> shift. It\u2019s making these types of statements to yourself:<\/p>\n \u201cI\u2019m not the type of person who spends hundreds of dollars a month on clothes and shoes that I\u2019ll wear once and then stuff in the back of my closet.\u201d <\/p>\n \u201cI\u2019m not the type of person who spends money to impress people.\u201d<\/em><\/p>\n Would you read a bunch of books? Learn new languages? Start your own company? Teach fitness?<\/p>\n If your lifestyle isn\u2019t fueled by consumption, you can probably get your monthly expenses to a pretty reasonable spot. Let\u2019s say you need $3,000 per month to live comfortably (just you, not your partner). For reference, my budget accounts for spending about $2,700 per month, and I live in Dallas.<\/p>\n In order to withdraw $3,000 from an investment account every month and have the interest (at an average of 7% returns, which is a standard estimate) replenish what you\u2019re using, you\u2019d need $900,000. <\/p>\n If you\u2019re using $3,000 per month total, there\u2019s probably not room for $1,500 per month in bullshit. Let\u2019s circle back to my personal example, where I (essentially) transitioned over time from wasting $1,500 every month on stuff that wasn\u2019t fulfilling to investing it instead.<\/p>\n After 20 years of investing $1,500 per month (with a 7% return), I\u2019d have $761,000. To hit $900,000, you\u2019d have to do it for 22 years.<\/p>\n I\u2019ll be 47 years old in 22 years. <\/p>\n Now let\u2019s say that, instead of investing that $1,500, I continue spending it on compulsory consumption. That means my expenses every month would be $4,500 (my original $3,000 in fixed expenses, plus the $1,500 in bullshit). In fact, let\u2019s even crank this more conservatively \u2013 maybe your expenses are just increasing from $3,000 to $4,000.<\/p>\n Now, instead of $900,000 in an investment account that you\u2019d need to support yourself using only your investments, you need $1.2 million (to withdraw $4,000 per month and have the interest replenish your spending). <\/p>\n Not only that, but you\u2019re investing far less \u2013 let\u2019s say you\u2019re still able to invest $500 per month. <\/p>\n It will take you 40 years to hit $1.2M if you\u2019re investing $500 per month. <\/p>\n Holy shit!<\/p>\n Do you understand what this means?<\/p>\n These are your two options, using our example\u2019s income\/spending figures:<\/p>\n Spend $4,000 per month and invest $500 per month<\/p>\n Retire in 40 years with $1.2M and continue using $4,000 per month in early, financially independent retirement<\/p>\n<\/li>\n<\/ul>\n<\/li>\n Spend $3,000 per month and invest $1,500 per month<\/p>\n Retire in 22 years with $900,000 and continue using $3,000 per month in early, financially independent retirement<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n Of course, this math exists in a tax vacuum \u2013 but I hope it illustrates the staggering amount of time you can reclaim.<\/p>\n I am happier now than I was when I was spending $1,000+ per month on random stuff. I feel more joy, I appreciate my belongings more, and I spend my time far more intentionally. <\/p>\n But it\u2019s a practice. I\u2019m excited to see how my strategy evolves over time, but I can say with complete confidence that the single-most impactful thing I\u2019ve done to change my financial life over the last few years has been cutting ties \u2013 continuously and mercilessly \u2013 with the materialistic expectations that used to absolutely rule my perspective on a day to day basis. <\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":" I\u2019ve spent a lot of time recently thinking about the phenomenon of lifestyle creep. Even if you don\u2019t know what lifestyle creep is, I can almost guarantee you\u2019ve experienced it to some degree. It\u2019s that sneaky thing that happens when you start to make more money and \u2013 suddenly \u2013 you begin to spend more, […]<\/p>\n","protected":false},"author":178814,"featured_media":2450,"comment_status":"closed","ping_status":"open","sticky":false,"template":"si-template-single-post-everyday-spending-and-budgeting.php","format":"standard","meta":{"footnotes":""},"categories":[37,36],"tags":[45],"class_list":["post-437","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-financial-independence","category-spending-and-saving","tag-everyday-spending-and-budgeting"],"yoast_head":"\n\n
Where minimalism enters the scene<\/h4>\n
Variable lifestyle expenses and how we can spend intentionally to fuel joy instead of compulsory consumption<\/h4>\n
What would you do if you could retire early and do whatever you wanted?<\/h4>\n
A zillion records should be scratching in your head right now<\/h4>\n
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In my mind, minimalism is the philosophy that enables this lifestyle joyfully<\/h4>\n