Lifestyle Inflation


I have been spending a lot of time, lately, thinking about the brain’s tendency to never be satisfied. I actually read a scientific article all about how the brain is actually made that way. It is the underlying reason that humans strive to be, do and have More, even when it could be argumented that they have Enough, or even More Than Enough.

In America, we call this striving for the American Dream.  Think about 50 or 60 years ago. What did that mean? What did someone have to attain to have achieved it? A home of their own. A decent job for at least one spouse that could make ends meet. Maybe a car. A kid or two.


Now what does it mean? Maybe the same for some. I would say, though, for most of us, it is much more than that now. It isn’t just having a home, but the best home. A fancy car with all the bells and whistles. Each and every new gadget. New clothes. Electronics. The list goes on. Don’t forget retirement with enough money to travel. Savings accounts. Cell Phones.

With built in obsoletism in electronics, and inevitable cheap construction on almost everything else, chances are we don’t just get anything once, either. Then there is inflation. Everything costs so much money. Supposedly, wages keep up to match those inflated prices, but I remain sceptical about that. My dad bought the house we grew up in for less than $60,000, 30 years ago. At the time, he made about $100,000 a year as a machinest, working a lot of overtime. I make less than that now as a nurse with over a decade of experience, and my house was $169,000 8 years ago. If I were to buy it right now, it would be about $350,000. I could not afford the payments on that. My own house. Ironic. If I sold it, and used all the extra money toward another house, most likely I would end up with a house just like it and a mortgage higher than I have now.

Thinking about this helps me resist the urge to give in to what is now termed “lifestyle inflation.” That is when you keep increasing your lifestyle to meet the amount of money you make. In other words, we spend what we make. Constantly upgrading, or rebuying, as the case may be.

I know many people who have now bought their 3rd or 4th home. They sold each one, and moved in to the next, more expensive, fancier one. Subsequently, their mortgages have not ever gone down. Some even pay more now. While in some cases they also make more money, it doesn’t seem to even out.  In fact, many pay a very large proportion of their income directly to their house, without even making extra payments. The same goes for cell phones and countless other gadgets. I could pay more for the newest, fanciest version every year or two. I could spend all my money on Stuff. I choose not to.

Do I ever look around at all the big, beautiful houses and wish I could have the same? Sure. Truth is, I probably could. If I want to spend all my money for it. To me, though, it seems like a lot to pay, when what I have now serves the function just fine. A new house wouldn’t make me sleep better, or cook more delicious food. A new phone won’t change how I connect with people any better than the one I use now. It wouldn’t change my worldview or give me new experiences. I would rather spend my extra money on life experience. Travel. Time with friends or family. Experiencing new things.

How does one resist Lifestyle Inflation?

I make it a rule to make myself wait for new purchases, especially large ones. The bigger it is, the longer I wait, usually. I often find that if I wait a bit, the desire wanes, or I come up with reasons that I don’t really need it.

I always ask myself if this is a Need or a Want. Will it truly make my life better? Is it worth giving something else up to have it? Could that money be better used to enrich my life in some other way? Will I still have whatever it is in a year, 5 years, a decade? I tend to think things are worth more if I see myself wanting or having it longer.

I also ask myself Why I want it. Is it because everyone else has it? Is it really stupendous and unique. Will it make my life easier or happier for any extended amount of time?

Last, I consider where the money for it will come from. Do I have leftover money at the end of the month, when all the bills are paid? Did I already put some money into savings or investments? Will it have to come out of Savings that I may want to use for something truly wonderful, or even for emergencies?

Take Aways

It is a natural part of the Human condition to always want the newest, shiniest toys. We are programmed to always want more. That goes for stuff and even internally. We are rarely satisfied for long. And, that is ok. It is also what drives the human race to devise new and fantastic technology, and improve our lives. It is important to know this about ourselves, so we can consciously redirect how that internal drive manifests itself in our lives. Instead of accumulating unnecessary things, try to steer that drive toward experiences or self-improvement. Things are temporary. They are not who you are. Choose them wisely, and always leave yourself a little Financial Space at the end of the month if you can. You will find that you have a lot less stress about money if you see some of it going into savings, to be used to truly enrich your life or cover for life’s unexpected events.

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