Lifestyle inflation – the silent assassin!

I’ve written previously about the millions of people living paycheck-to-paycheck. It doesn’t matter how much you earn but rather how much you spend. According to a recent Nielson survey, 25% of American families earning more than $150,000 per year still live paycheck-to-paycheck, so even the wealthy aren’t immune. Apart from poor financial habits, a key reason for this ongoing money stress, for many people, is lifestyle inflation.

It is a gradual, subtle and common problem that’s killing our collective finances. The harmful effects occur over time and in a way that often goes unnoticed.

Like the fable of the boiling frog, who didn’t perceive the danger of the increasingly hot water and was slowly cooked to death, many of us have been unwittingly turning up the financial heat in our own lives by trying to keep up with the Joneses or “upgrading” our lifestyles when we get a payrise.

Most of us have been victims to the silent assassin of lifestyle inflation. Our spending inches up year-on-year, and what was once something you considered a luxury item is now a must have “need”.

Lifestyle inflation, a silent assassin

Those moments when you convinced yourself that you deserved it because you work hard, or that a “one-off” treat won’t hurt, have added up over time. The aggregate impact of decisions to get a nicer couch, second car or bigger house increase our monthly spend commitments and raise the bar of what we need to earn.

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Embarking on a No New Stuff year-long challenge to keep me motivated on the journey towards longer term goals

Regular readers of my blog will recognize a number of repeating themes appearing in posts over recent months:

  • A desire for “freedom” from the weight of personal possessions and from the need for paid work (especially in an unfulfilling corporate job).
  • Acknowledgment of the value and importance of time, that we normally trade for things of little true value.
  • The lack of sustainable balance in most of our lives and in society at large. At a personal level, recalibration is needed around things like technology and social media use, TV, diet, exercise and consumerism. The bigger picture is equally out of equilibrium, with ever increasing social inequity and a willful ignorance about the ongoing damage we are inflicting on our planet and home.
  • Recognition of the need for challenge and voluntary discomfort to drive personal growth and lighten my ecological footprint.

Intellectual understanding and knowing are not enough. For change to occur, we need to take positive action and do something!

The journey towards Financial Independence can be a long, disciplined grind and we’ve set in place processes to hit our targets. We’ve also made great progress downsizing our possessions and housing. I’m still researching what effective mitigants I can put in place to reduce my personal contribution to global warming. Things are moving in the right direction but it’s a marathon, not a sprint. So how to keep motivated in the short term?

In the spirit of consuming less, spending less and hopefully learning to live with less, I’ve decided to undertake a year long challenge of No New Stuff!

The shopping ban will require avoiding sales, special offers, amazing discounts and other marketing gimmicks encouraging us to buy, buy, buy!
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