Is lifestyle inflation a choice?
Do you remember when you just finished uni or school and started working full time and had soooo much more money than you used to? I definitely do, but because of the saver that I am, I sort of continued living like a uni student for a while. Spending as little as possible, I didn’t go out for dinners or buy lovely clothes or anything. It was probably a blessing in disguise really because there is also the opposite side of the equation where people start to spend up big on all the fancy things as soon as they get a job.
I’ve been thinking about lifestyle inflation and the things I spend my money on now without batting an eyelid that would have made me sick back in the day. Part of me thinks that some lifestyle inflation expenses are unavoidable and some are by choice.
The traditional idea of lifestyle inflation is that as your income increases, so do your tastes. You want nicer clothes, a fancier car, you want to eat at more expensive restaurants or start eating at restaurants more often. With a higher income you feel as though you don’t have to watch your pennies as much and you start to enjoy the upmarket things in life.
It is common however for people to continue to let it get out of control and end up extending themselves beyond their means.
I definitely have some lifestyle inflation expenses that are by choice.
- My fancy coffee – I’m a coffee snob.
- Restaurants and food – I previously used to think a kebab was a cheap take away meal, now I prefer Thai or Indian for my casual take away which is probably 3 times the price. I also love going to restaurants and do so every week without fail. I don’t even think about it, it just happens.
- Alcohol – If I am drinking, I am drinking exactly what I want to. Gone are the days of UDLs and passion pop. (Yuk, I am shuddering just thinking about it)
- Beauty products – I’m 30 this year guys, I need my moisturiser! And sunscreen, toner, cleanser, exfoliator, eye cream….. yeah you get the picture.
There are however a few expenses that I have now, that I don’t really feel like I have a choice in. I am happy for you to challenge me on this, but I consider these expenses to be almost compulsory.
When I first started working I was scanning documents at a bank. I had the cheapest corporate clothes I could get from Kmart or whatever cheap shop was in the shopping centre at the time.
And that was fine…… for an 18 year old scanner. The thing is, I can’t really get away with a $10 shirt in my corporate office anymore. I wear suits a lot of the time, and you can’t really get a suit from Kmart even if I wanted to.
I wear high quality and granted more expensive corporate clothes now, and I kind of feel like it just comes with the job. If I really really wanted to, maybe I could get away with super cheap clothes, although it is likely I would be replacing them more regularly.
Whilst I don’t ‘need’ higher quality clothes, it certainly feels like I do and that there is an expectation to dress a certain way.
I love my wedding and engagement ring, but I’ll tell you what they can get dirty. I take them off to do the dishes, cook, clean the bathroom or go to the gym, but that doesn’t stop those bad boys from losing their shine after a while.
Last time I got them cleaned at the jeweller, it cost me $40. Given that they need to be done at least twice a year, the cost is expensive if you ask me. What is the point of having something nice and beautiful if you don’t take care of it, and it doesn’t look nice and beautiful.
I think of 18 year old Cara who would never have spent that much to clean jewellery, but 18 year old Cara also didn’t own any good jewellery either, so would you consider this to be lifestyle inflation? I feel like it is.
Special running shoes
I used to wear my crappy $20 trainers to death when I was 18, but I am older, wiser and more injured now, so don’t flinch when I have to pay $250 for a pair of running shoes every year.
Preventative health care
I didn’t go to the physio when I injured myself back in my netball days, which is why I now have some severe scar tissue around one of my ankles. I now understand the importance of my health but it does come with a price tag.
These days I go to the physio, dentist, optometrist and doctors on a yearly basis. I have private health insurance which helps, but I’ll tell you what, it can really cost a lot to keep your body working for you. I don’t feel like I have a choice in this because I honestly believe that my health is my number one priority, but these were not things I paid for 10 years ago.
Maybe if I had, I wouldn’t have as many niggling injuries as I do now…. The beauty of hindsight.
What about you, do you have any lifestyle inflation expenses that you think you can’t change? Are there any new expenses that you justify because you earn more?
I have also written another article regarding income protection for the Humble Investors website. Check it out here: http://humbleinvestors.com.au/value-income/
– This post is from our resident senior financial planner, Cara Brett. Check out her details in our about us page.