A Little Lifestyle Creep is OK—but Be Careful, it’s Hard to Go Backward

In 2021, I transitioned from a 2BR apartment on a busy street in Dallas, Texas, to a 3BR home on a beautiful, tree-lined lane in a quaint town in Northern Colorado.

Our rent jumped from $1,741/mo. to $3,000/mo., and I spent many a night tossing and turning, wondering if we were making the right decision. (Here’s a post about why I ended up opting to rent a more expensive home.)

The first week we moved in, I felt like I was in a palace.

The sprawling marble kitchen island gave me “beach house vacation” vibes, and we’d literally lose each other. “Wait, where are you? I can’t find you!” we’d exclaim, giddily, as we tried to converse from one end of the house to the other, unable to locate one another in aLL tHe DiFfErEnT rOoMs! A luxury reserved for only the wealthiest, I thought.

(This house is ~2,000 square feet, about 500 square feet smaller than the average home size in the US. It’s no mansion. But compared to our 1,000 sf 2BR apartment, it was a huge upgrade.)

Luxury is relative

Today, I love this house and I’m thoroughly enjoying living my life in it. Rent day sucks a little bit more than I’d like it to, and I know we could’ve rented an “inexpensive” townhome for $2,400 instead and saved $600 per month, but I love our tree-lined street, damnit!

Weirdly enough, though, something interesting happened a few months in:

It stopped feeling like a beach house palace with more rooms than people.

It just started feeling like my house.

My mind and body normalized to the surroundings, much like they had normalized to my 2BR apartment before.

But now?

Now if I tried to live in my 2BR apartment again?

While part of me feels a little nostalgic for that place and that phase of life, there’s another part of me that’s like, holy sh*t, that would feel tiny by comparison now.

It’s all relative, but it’s difficult to downsize—lifestyle creep typically only creeps in one direction.

The same thing goes for cars

My first car was a 2004 Acura TL. The seats were ripped, it had a few door dings, and it was about 10 years old by the time it became mine.

But man, I loved that car. It was a great first car for a teenager. Sporty enough to make me feel cool as hell, but with relatively low residual value—so it wouldn’t have been a huge loss if I crashed it (though I can proudly say I didn’t!).

After it hit 225,000 miles and had suffered one (1) gnarly hit-and-run, it was time to retire the car and get a new one.

My parents leased an Acura RDX for me with the remainder of the money they had set aside for my college education. Because I ended up getting a scholarship, they had money earmarked for me that went unused. They told me if I graduated with a 4.0, they’d cover a lease on a new car for the first three years. After that, it was up to me to figure out my #wheels.

(I don’t think they thought I’d actually do it—joke’s on them!)

Because I was #YoungAndDumb, I said, “Sure! Please agree to pay the steepest depreciation hit on this vehicle so I can promptly give it back with nothing to show for it when I high-key cannot afford to purchase it outright when the lease terminates. Sounds great.”

(My take on leasing and why it really gives the driver the shaft lives here, though if you’d like an updated and more nuanced take, check out this “rent vs. buy your car” episode. I always joke that I can dunk on these decisions because I’ve made them myself and lived out the shitty aftermath firsthand. I’m trying to save you from my own screw-ups.)

I wasn’t thinking about three-years-from-now-Katie and what the hell she was going to do when the lease ended. I was just focused on the image of right-now-Katie cruising around Dallas in a brand-new sport utility vehicle.

By the time the lease ended, my budget for a car was $20,000 total.

But after driving a brand-new luxury SUV for three years, do you know how interested I was in downgrading to a responsible, used Honda Civic?

Approximately 100% uninterested.

The problem was, I couldn’t afford to purchase the RDX outright and still stay within my budget. I wanted an Audi Q3—also way over budget, even used.

But I was so stuck on continuing to drive a “nice” car (because how fun is it to go from a fancy car to a regular one? Decidedly un-fun) that I ended up purchasing a used Audi A3. I didn’t want to choose (what felt like) a downgrade.

Don’t get me wrong, I really liked that car (I ended up selling it after a year anyway since we moved to a mountain town where a jellybean with FWD wasn’t really practical), but there was this weird pressure throughout the buying process to get something at least almost as nice as what I had before.

It’s hard to go backward.

Lifestyle creep is fine within reason, but remember: It’s hard to throw it in reverse (pun not intended, but embraced)

Part of the reason I was so hesitant to lease this home was because, on some level, I knew that it was likely an irreversible step up the lifestyle creep ladder.

I knew it would set a new precedent for my baseline that would be hard to reverse—and so far, that’s held true.

Before, any house with a front door and functioning plumbing would’ve gotten me hot and bothered.

Now, the houses I lust after in our neighborhood are bigger, prettier, and fancier than ours.

That’s why I find it’s usually wise to take smaller steps than you’d think necessary so you can really wring all the joy and excitement out of each and every incremental inch upward, versus making giant leaps and bounds to which you’ll acclimate quickly (like I sometimes did).

Lifestyle creep—that is, wanting to experience outward proof of your own growth, success, and hard work—is natural. Striving for more is human, which means it’s probably more sensible to try to work with those inclinations (tiny, intentional steps up the metaphoric ladder), rather than deny they exist. 

Because it’s not just asking yourself “Can I afford this right now?” It’s, “Can I afford this forever?”

That’s why I think it’s necessary and helpful to constantly reevaluate your FI (financial independence) number. My FI number has certainly gone up since we moved here, though my income has, too.

I like to recalculate the goal every single year to make sure that it’s not creeping upward too quickly.

I earn more (and work harder) now than I did when I began working seven years ago, so I want to allow myself to selectively enjoy nicer things—but I don’t want to spend the same percentage of my income.

For example, when I first began working (and after I got my financial sh*t together, to be clear; that took about a year) I was probably saving about 30% of my income—a really respectable save rate, especially on my salary at the time. 

Now that my income is higher, 30% stops looking so respectable—because spending 70% of a much higher number would connote a pretty extreme lifestyle. 

As a general rule, even if my spending nominally rises with my income (a spending jump from, say, $2,800/month to $4,500/month allowed by a higher income), my savings rate should be rising faster.

My savings mostly go toward investments, but they also help buffer my cash cushion—because as my life becomes more expensive, my old “$10,000 emergency fund” is no longer as powerful as it used to be.

This ensures I’m not actually slowing down and getting farther behind my goals, despite earning more, which would be a pretty self-defeating way to make financial progress.

A little lifestyle creep is fine—as long as you’re conscious it’s happening, and you’re comfortable with the idea of paying to maintain that standard of living indefinitely.