How to Avoid Lifestyle Creep

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Everyone has suffered from lifestyle creep to some extent. Somewhere along the way, you go from eating ramen noodles to the finer things in life. You become used to spending your entire salary.   

In this episode of the Finance For Physicians Podcast, Daniel Wrenne talks to Jeff Wenger, a Certified Financial Planner (CFP®), about how to avoid lifestyle creep. What is it? How does it happen? How do you prevent it?

Topics Discussed:

 Tricky Transitions: Going from little income to being paid the big bucks

  • Keep up with the Joneses: When you make more money, you tend to splurge
  • Lifestyle Creep: Taking on obligations and a million tiny spending decisions
  • Hedonic Adaptation: Making progress and adding little pleasures leads to pain
  • ‘Drug’ of Choice: Easier to add comfortable things, than to take them away
  • Why is lifestyle creep so dangerous? Lack of awareness creates conflict
  • Symptoms: What you want, not what you need; how disposable income is spent
  • Risk Factors: Are you a spender? Listen to others and seek expert guidance
  • ‘B’ Word: Be intentional and aware of budget by checking your cash balances
  • Team Effort: Resist temptation, finger pointing; be accountable about spending
  • Lifestyle Creep Challenges:
    • Acknowledge underlying financial issues
    • Be intentional before spending
    • Identify highest priorities to align finances 
  • Alternatives: Time, dedication, and intentionality to find free options

Links:

Monitor Spending in 10 Minutes Per Month

Jeff Wenger on LinkedIn

Cash Flow Tracking Excel Templates

What Is Financial Therapy

Wrenne Financial Planning

Finance For Physicians