Rules to Lifestyle Inflation

Since I run in the circles of frugal living and personal finance blogs, I’ve seen a theme over and over again that I just had to speak out against a teensy tiny bit.  You see, the theme is this:  Lifestyle Inflation is bad.   If you get to the point where you pay off your debt and start buying nice things, you’re just as guilty as you were all those years you were racking up credit card debt.

Hopefully in everyone’s life, there eventually comes a time when you are no longer in debt and can make spending choices again on your discretionary income.  The problem is that sometimes it’s hard to find a middle ground after quitting non-essential spending cold turkey for such a long time.

I’m here to tell you that there is a happy middle ground.  You see, if you don’t ever have any lifestyle inflation, you’ll end up like my uncle who never bought a new bit of furniture in 50 years. He had this ancient pea green couch with a missing leg that was being held up with a couple of bricks. It was like that for 20 years, yet he had so much money in the bank that he never touched his savings.  He lived completely off his SS check and rental income and was still able to skim a bit off the top of that too.  Another miserly example is Jacq’s dad from Single Mom Rich Mom.   Go read the story.  The guy is wealthy by most people’s standards but hoards money like there’s no tomorrow.   Although I admire their resourcefulness and simple lifestyle, there’s a point when you look at guys like that and wish you could convince them that it’s okay to buy a new pair of dickies once in a while and there’s only so many times you can glue the sole of your work boot back on before it becomes uncomfortable to wear.  And that’s just my point.  Having no lifestyle inflation is just as bad as going overboard because you tend to make due with things that really have a negative effect on the quality of your life.  You buy the cheapest of everything even if it means being uncomfortable in it because it’s “good enough.”

Now, since us frugal types have a tendency to over save and be super paranoid about the next rainy day around the corner, I thought I’d lay out some ground rules that anyone can follow.   As I write this, I realize that this article is really meant for the people out there who really are living way below their theoretical means…not the people who bought into their dream homes from the get go for the biggest loan they could take out.

Affordability Questions:

In this case, I’m already assuming you are out of credit card debt and have an emergency fund saved. Now, whenever there’s any kind of big purchase to be made, you can ask yourself these basic questions:

1. Do I have the cash to buy this item outright?  If yes, move to question 2.  If no and it’s not a house, then ask yourself if you have a big enough emergency fund and/or if you can save for a bit longer.

2. Do I have something else I need to be saving for that I’m not doing already? If no, go to question 3 (For example, are you saving 15% or more into retirement, are you saving for college, etc).

3. Will I get my money’s worth out of this item? How often will the item be used?

4. Will I be just as happy with a good quality used version of this item at a lower cost? (The answer for me is usually yes on everything but clothes and electronics).

5. Is it a good time to buy this item?  If you’re frugal, you really will feel better about a purchase if you think it’s a good value.  It’s much harder to stomach buying a house during a hot market or paying full price for something.

If you’re not sure on #3, then you can choose to delay the purchase for some designated amount of time. If you’re still thinking about it months later, then it is indeed something important to you.  Lastly in many instances with material items, it is usually possible to resell those items if you’re not getting what you hoped for out of them, so buying decisions can also be reversed. Maybe all your money can’t be recouped but some can.

Babci Should Spend More Too

I definitely inherited the money hoarding tendencies from Babci.   I remember about 15 years ago Babci was having back issues and I bought her a new mattress.  She called me and started crying the next day because it was the first time she got a good nights sleep in ages.  That horrible old mattress she had was the cheapest thing you could buy at the salvation army. It was terrible but I suppose to her, it was a big upgrade from the straw tick beds that she grew up in.  Now it’s time again for a new mattress and she’s still fighting me that the old one is still perfectly good (just like she did last time).  Babci..you use the mattress every freakin day..probably more than any other single item in your house.   Stop fighting me about it already.

I’ve bought a lot of things this year that I have felt a little guilty about.  I keep saying..I’m spending too much money, I’m out of control. But then, when I look at what I spent this year as a % of my income, it’s a drop in the bucket, plus we didn’t take a big vacation this year either.  That’s when I realized it’s that little money hoarder in me fighting back.   For example,  I just bought a pair of Muck Arctic Sports.  I told myself at the end of last winter that I won’t go another season with wet and frozen feet.  All I had was hiking boots and they were useless in deep snow. I had gaiters that I wore with them, but they were also spent with patches on them and a safety pin holding one of them up.   I now wish I also had the Mucks during the wet mushrooming season we had.  What a soggy mess my feet were after every excursion mushrooming.  After one of my sopping foot adventures I finally said to myself that I’m no better than my uncle.  I’d rather have cold wet feet than spend $150 on boots I’ll probably use for 15 years or more (yes, that’s how old my other hiking boots are).  And I was like..how the heck did I manage to survive all my life without snow boots (I mean I’m almost 40).  What the heck is that all about?  I’m nuts.  PS..we did just get over a foot of snow this week and I was very happy to have those boots.   As I analyze myself, the way it happened was I kept telling myself every year that I’d get them at the end of the season when they’re on clearance. I never did because I’d either put it off yet again or they were out of my size by the time they went on sale and on it went for literally decades.

I Need a Spending Budget

I’ve decided that I actually need some kind of spending budget on things like clothes, undergarments and  housewares because otherwise I tend to wait way til the point when everywhere I look, I need stuff.  Last winter I really needed some work clothes badly and everything in the stores was covered in ugly ruffles or old lady flower patterns.  I bought a few things out of desperation and my husband ended up making pirate noises at me when I put one of the shirts on and told me I looked like his grandmother in another one. Now those shirts are at goodwill. Although I’m not particularly fond of shopping, I think I need to level load my spending in that department so that I’m not as desperate when I shop. Desperation usually means buying something/anything because you have to, which means you don’t “love” your purchases, which inevitably leads to buyer’s remorse and money wasted.

It seems like the only thing I don’t have a big issue spending money on is fixing up our homes. I guess when we bought fixer uppers, we knew that there would be some annual amount of money and time that needed to be spent in order to “pay as we go” vs buying something more expensive from the get go.  In hindsight, this isn’t the cheapest way to go, but at least we get to customize the homes to our exact taste.  I think the reason I don’t have an issue with it is because in a small way, the spending I’m doing in that department is building equity too, so it’s almost like saving.

So, do you have money hoarding tendencies? How do you justify purchases?  Do you catch yourself making do on things that really should have been purchased long ago? What phase of spending are you in?

 

 

 

 

 

 


Comments

36 responses to “Rules to Lifestyle Inflation”

  1. GREAT post! I can totally relate.

    I would add to your list, ‘Am I comfortable with our cash emergency fund.’ (Is it at least some pre-determined amount?)

    Another thing I do is think about the time vs. money trade-off. Sometimes putting off a purchase is going to steal time from me later and it just isn’t worth it. So I own a small number of very expensive things that I often did not get on sale, and I’m ok with that. If I need to be in the city to buy something and I’m only in that part of the city once or twice a year, then I am ok with buying the item even if it isn’t on sale.

    This past weekend I spent $200 on a buttload of stuff at the outlet mall. I have not been shopping for clothing for literally 3 years (exception: 2 bras, shoes). It was easy to buy things because I knew I wasn’t going to get to clothes shopping for at least another year, and I had a list of things I needed. Also… neither Zout nor Oxyclean was successful 🙁 and I’m sick of trying to get the stains out of my ancient business casual shirts. Better to replace them with $10 markdowns from the Loft outlet. I also had a shopping buddy who is crazy with the coupons– she had a 20% off card and saved me $40 instantly. I wouldn’t want to put that kind of time in, but she shops recreationally.

    Now that we’re well off I let myself buy anything I want at the grocery store. Freedom!

    1. Grumpies – Sorry to hear about Zout. I use it mainly on kid stuff. I assumed you were too. I have found nothing to get rid of armpit and ring around the collar stains. My only solution to those is to buy darker colored shirts. I had a particularly good visit to Ann Taylor this fall. I went back 3 times. It was one of those rare occasions that I found stuff that fit, I liked it, and it was 40% off. I was very happy.

      Good Point about buying some things full priced too. There are certain grocery items that I can’t find around here, and my mom always gives me a shopping list when I go out to Rochester. I don’t care if they’re on sale or not because it would be much more expensive to mail order and ship.

      1. Well… you would think the spillage I get on my shirts would be *like* kids stuff… but I think the problem is that if you don’t notice until you take the shirt out of the dryer even Zout will not help.

        I need to be more careful when eating. Or something. If I notice the spills right away when they’re new, they can be saved.

    2. Just wanted to add that I really hate buying bras and shoes. I think it’s because you always need them, they are not cheap, and they don’t always end up fitting well even after shopping carefully! I have finally learned to get the same brand shoes online where I can often find a discount.

      Someone should really come up with a good stain remover for business casual shirts. I hate to get a stain on a beautiful white shirt even if I did get it on sale! Some people use the regular liquid laundry detergent directly on the inside of shirt collars and cuffs. You can use the regular amount for the load but just put it on the places that seem to need it the most. I then scrub the collar or cuffs together a bit to get the soap into the fibers a bit. It seems to help.

  2. WONDERFUL post for recovering PTSD from over-frugality. 😉 I just want to die broke.

    I think my dad lives on about $500 a month now, maybe less. I’m not sure what happens to make people that way but I think it could be that you have to get yourself into the mindset when you’re trying to build savings that you feel good about yourself to not spend. You tell yourself that all those other people are foolish to spend what they do. Then there’s a whole lotta cognitive dissonance later if you let up on yourself, even though you can.

    I resisted buying my SUV for a year and I know it was out of “frugal guilt”. The inconvenience finally got to me but also because there was no way I was going to be walking or biking everywhere in -30C weather this winter or expecting my son to do it in conjunction with his 3 jobs (but the thought was crossing my mind that I “should” be able to do that). And I second the wonderful wonders of a brand new bed. That’s the best $2k I’ve ever spent (full retail at that).

    I haven’t gone all crazy like Nicole has at the grocery store – yet. 😉 But I buy 1/4 beef once a year so that I get all the great cuts and the hamburger stuff. I make sure that we have a policy of “no cook Fridays” and that’s our time to do takeout (or if we’re too lazy even for that, I throw in a pre-prepared lasagna or pizza – not made by me). I also make sure we have a few self-indulgent seafood type meals every month and look forward to the at-home crab feasts.

    When I go clothes or shoe shopping now, I try to not even look at the price tags to make my decision and just look at how it fits and how it’s made (and if it won’t attract dog hair). Generally, if I’m in the right store, I know the clothes are within my price range. I still buy my jeans at the thrift store because I only like a certain brand and that’s the only place I’ve been able to find them. But I’ve only bought 2 dresses and 2 sweaters this year. If I go back to work soon, I’m going to force myself to buy quite a few new things since I haven’t bought work clothes for the last 4+ years. Maybe longer.

    1. Jacq – so much of this resonates with me…delaying purchases for way too long, forcing yourself to buy stuff…definitely a result of the environment we grew up in. I am getting better at it. I try to be the same way with clothes. It seems the clothes I like the best are usually the ones I paid a higher price for, not something I got off the clearance rack. I shop for clothes so infrequently that I don’t think it matters anyway. I have to buy special sizes because I’m so tall, so I get hosed anyway. A lot of times those sizes aren’t on sale or even in stock, so I have to mail order the stuff once I know which cut fits best. PS. I wish they’d start making jeans without stretch in them again. I really miss those.

  3. Not so many of us, eh?

    My dad still can’t spend money, but he’s been enjoying giving it away to worthy causes. And he has a good time… right now he’s out on the East coast visiting all the various occupy Wall Street protests. Staying in youth hostels. Enjoying the speakers.

    1. Grumpies – wow..it’s strange and impressive that your dad can be totally frugal for most of his life and then start spending and giving it away. He must have done a bit of it all along because I’ve never seen people turn their spending on and off like that.

      1. He’s not spending! He’s just giving. He does not know how to spend and seems to be incapable of it.

        1. Nicole, my dad is exactly the same way. My guess is he gives away 5-10 times more every year to charity than he spends on himself.

  4. I actually have a post coming up about how I have issues spending when I should (a broken glass was the last straw).

    I think for some people, money can be an object that is hoarded just like collectible figurines or anything else. I guess if I was going to be a hoarder, money would be my preferred ‘object’ to hoard. (At least I would still be able to move around my house and the neighborhood wouldn’t look to evict me.) However, I think extremes can lead to unhappiness. I am guessing all that saving is being done out of fear and is used to provide security, extreme security.

    You are so right, if you wait until you ‘have’ to buy something, it can lead to disaster.

    1. Kris – looking forward to reading the post. For me, it was the broken measuring cup that I ended up replacing for $3. Hoarding money is much more house friendly. You can even keep it in a bank so it takes up no space at all.

  5. I wouldn’t say I have money hoarding issues, because I do spend quite a bit (mostly on travel! whee!). But. I don’t buy a lot of stuff, so I do have trouble with replacing things. I just seems wrong to me to get rid of stuff that still works.

    1. Jackie – I’m a big fan of getting stuff on craigslist, so I don’t feel like it’s waste. I try to resell things too. We just got a barrister bookcase (used), so we are getting rid of our particle board one. I’ll probably just do a curb alert and give it to someone for free, but I hate taking things to the dump. With my mom’s house, it’s in such horrid condition (plaster coming off the walls, bathroom not draining and moldy), that I feel no guilt at all upgrading.

  6. I’ve gotten into the ‘do we really need to buy it?’ obsession and need to let go just a bit. I love ‘Your Money or Your Life’s’ quote on frugality:
    “Frugality is enjoying the virtue of getting good value from every minute of your life energy and from everything you have the use of.”
    What I see is that some frugal people feel the guilt of spending. My attitude is if you have the money spend it on what makes you happy. Don’t subscribe to buying into what makes your co-worker, your friends, your extended family happy. My caveat for myself is to have little or no debt, an emergency fund, a savings, and retirement.

    1. Molly – that’s a really good quote and also good advice on buying stuff that makes you happy, not that other people expect you to have.

  7. I’m a spender trapped in a saver’s body, so unfortunately I don’t really have trouble inflating my lifestyle. My mom is very frugal, but she’s the first to tell me “spend when it matters.” So I think I never grew up thinking that spending is BAD. Spending when I can’t afford it or spending when I am neglecting my long-term goals are bad, but otherwise money is just a tool. You have to wonder what the folks holding on to the money is thinking – does just having that money bring them more happiness than being comfortable?

    1. Well Heeled – I think hoarding money gives folks a feeling of comfort rather than happiness. And just like hoarders of other things, letting it go of it has a certain amount of discomfort to it, so people avoid it if possible. I have never met a hoarder that was happy being buried by stuff, but it was certainly unhappy and even painful to part with it.

  8. Oh where to start with this post – it’s so good and I can totally relate.

    I need to apply your rules all.the.time because I have over frugal and over spending issues – I still struggle to find the middle ground (except it seems with vacations where I can easily find it!) and I too can go for months avoiding buying a replacement for something that costs £5…..it drives my husband crazy.

    I think I still haven’t lost the fear of being old and in debt -which could easily have been a reality if I hadn’t wised up 6 years ago.

  9. Sandy, you are right – I am a serious money hoarder and it’s comforting to have the money and very uncomfortable to spend it. I voluntarily let go of about $4K a year so my husband and I can travel overseas, but anything else is hard. He wanted a new camera body for an upcoming trip…never mind that he has a great digital SLR with two new lenses and then another new camera he needed for our last trip. I immediately said that “joint” funds weren’t going to pay for it but he could spend his allowance money. I then felt guilty and mean. I paid off my condo before we were married, our car is paid off, our credit cards are paid off monthly, he saves 25% to a 401(k), I save 15% (he’s 6 years older and behind in retirement savings), and then…we save 42% of our take home pay and have a weekly allowance of $125 each. And I said no to a new camera body! Last night I asked him how much they were – about $400. Oh, I said. I thought it was going to be another $900 or so. So really $400 is not a problem. But, my first reaction to spending any unbudgeted money is always no. I come around after a few days and start to be more reasonable and adult. Thankfully, he knows that and doesn’t pick a fight with me.

    1. AMY,

      Nothing wrong with saying no. You have a budget for a reason :-).

  10. Great post, I guess I’m lucky that I’ve never been in either camp. I tend to buy what I need without guilt. I hate shopping so am really never been an over-spender. When I do buy, I usually buy in quantity (clothes) so I don’t have to go back for a while.

  11. I’m still trying to get myself into the non-spending mindset. But a spending budget is good for me, because otherwise I will break down in a weak moment and buy something anyway. If I set aside a certain amount that can go towards the fun stuff each month, then at least I can limit it.
    Also, I don’t think I’ve met all the prerequisites on your list to be able to loosen up anyway 🙁

  12. […] thinking about First Gen American’s post on Rules for Lifestyle Inflation – I thought […]

  13. This is actually why we came up with our allowance system. After having to be on a crash budget for almost a year, we both wanted to spend but were afraid to overspend or get ourselves back in trouble. So, we decided on a monthly allowance for each of us. If we don’t spend it, it accrues (so we can save up for things) or we can go into debt to ourselves as long as it will be paid back within a couple of months/by end of year.
    Of course, we don’t change our allowance amounts, even with raises…

  14. This post is great timing for me – I am on the cusp of paying off my debt and am thinking ahead on how to handle these types of purchases…

  15. […] Gen American with Rules to Lifestyle Inflation  I loved this post.  I am a fan of controlled lifestyle […]

  16. My MIL is a so stingy she spent an entire summer in horrible heat, just so that she doesn’t use the air conditioner and ‘waste’ money on electricity. We were abroad for 6 months and she lost 7 kilos, now she’s piling up the weight again. I assume she didn’t cook meat or ‘expensive’ stuff, so that she can save more money. While I do admire her for being careful with her money, when it comes to endangering your life and health for 2 cents, that’s way out of line.

  17. To me it is not lifestile inflation if you carefully choose what you spend the extra money on, if you just buy a new car because you got a raise or payed of you morgange or ever worse because “everyone else has one” that is lifestile inflation to me. If you buy a new car because you truly need one or because you really love cars and you can afford it that is just a lifestile choise that happens to cost a little more.

    My grandmother was just like your uncle however I dont think she felt that (or in fact did) miss out on anything that was important to here, what was imortant to her was family, friends, being active, being out in nature and working hard. She loved it and spent no or very little money.

    1. Sorry for the spelling of lifestyle:-)

  18. […] you need goals to save?  Alternatively, are you like Jacq and FGA and need spending goals in order to lifestyle inflate? Tweet, SU, Reddit, Digg, […]

  19. […] First Gen American has a great post on the Rules to Lifestyle Inflation […]

  20. Refreshing to have a different perspective. A frugal girl’s gotta let down her hair sometimes!

  21. This is a very interesting subject because theirs really no possible limit to how much money one can spend. A lifestyle can be thirfty or spendthrift what ever you choose

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