Lifestyle Creep, Housing, and Scaling Up with Intention

When I first moved to Dallas, I didn’t rent an apartment. I lived with my friend Kylie’s family.

Long-time Dallas natives, they planted roots in one of the nicest, most coveted neighborhoods in Dallas in the mid-1980s – long before the neighborhood had the esteem (and price tag) it has today.

Living in that house was awesome. We had a huge backyard (a rarity in Dallas) and were walking distance to some of the best shops and restaurants. It was laughably out of my price range. (To give you an idea of how out of my price range, I think they paid more in property taxes every year than I made in total gross income.)

When it was time to leave the (friend’s family’s) nest after a couple months, I watched friend after friend sign leases on $1,400/mo., $1,500/mo., and in one case, even $1,800/mo. one-bedroom apartments in the hottest neighborhood. They had granite countertops! Doggy spas! Infinity pools!

I was tempted, but somewhere deep down I knew I had no business spending that much.

My adult renting journey has always taken on a distinctly strategic form: Rent an older apartment in a second-tier neighborhood and haggle for a special with the leasing office – and always with a roommate.

In 2017, that took the form of a 2BR apartment in Victory Park. We paid (read: split) $1,775 down the middle for an apartment with a fridge that was older than the one I had in my family’s home when I was in middle school. Rowdy pool parties happened on Wednesday nights outside my window. There was no doorman or dog spa.

I lived there for two years: The second year, our rent went up from $1,775 to $1,795 and I was horrified. “They can just raise your rent like that?!” I scream-texted when I got the email.

When it was time to move on, we rented a 2BR apartment on Henderson Avenue – and this one was an upgrade. Finally, granite countertops and stainless steel appliances were mine – and thanks to a special and a changing rental market, we only split $1,741/mo. both years we lived there, which means it was actually less expensive than my less-nice place.

After a while, I began to identify as someone who had hacked housing

I would scoff at people who paid crazy four-figure sums for housing, since my rent bill had never surpassed $900 per month – and as my income rose and housing expenses stayed the same, I (naïvely) figured it would go on that way indefinitely.

I always felt, to some extent, like I was sacrificing a little bit compared to friends who lived in buildings with WeWorks, Pelotons, and cold plunges inside them, but was pretty proud of my ability to approach housing frugally.

When your roommate is your partner

One of my biggest “hacks” to living cheaply was always having a roommate – in that way, I was paying for “half” a kitchen but benefitting from the whole thing; splitting a living room but enjoying all of it. It just made sense.

This changes when your “roommate” becomes your spouse with whom you intend to combine finances – it’s no longer about splitting a rent payment down the middle.

For some reason that really messed with my perception of cheap housing – I found myself constantly reorienting prices to what my “half” would be, knowing on some conscious level that there are no “halves” when you’re talking about a joint checking account. But still, the idea of “per person” pricing persisted, and when it came time to begin looking for housing in Colorado for our move, I approached things differently.

Resisting lifestyle creep or optimizing for happiness?

One of the main tenets of personal finance (and the FIRE movement in particular) is that you cannot succumb to the siren song of lifestyle creep. Lifestyle creep is the pernicious thing that happens when you begin to make more money and – subtly – your expenses start to creep up to meet your new income.

It’s the, “I just got a raise and I’m going to treat myself!” mentality, but on steroids and on repeat indefinitely.

You know what the flip side of, “Ugh, no more splitting things,” is?

It’s, “Woohoo! Two earners!”

It just so happened that adding someone else’s income to my balance sheet coincided with me layering a pretty optimal amount of high-paying side hustles on top of one another, and as we sat down to fill out our Wealth Planner together, we realized that – even after taxes and maxing out our respective 401(k)s – our take-home pay would (in the good months) still be a lot more than I was accustomed to earning.

“Holy shit,” I said, leaning back on the couch, “Is that right?”

We combed through the numbers again and realized it was. Excitedly, we clicked to the “Recommendations” tab on the Planner and saw that the housing budget was in the mid-$3,000 range.

I typed Zillow dot com into the URL bar so quickly that my keyboard convulsed.

The tricky thing about earning more money

Remember lifestyle creep? That ^ conversation is the quintessential example, and I knew it. After all, it’s not like we had two solid high-paying jobs. We essentially had four moderately paying jobs (some certainly more moderate than others), and I was acutely aware that – statistically speaking – the likelihood of losing one (or more) wasn’t low, especially since my earning strategy was more about diversification than focus.

As the pandemic showed us, it’s always great to have multiple sources of income – not because it guarantees you’ll have more money, but because one source of income is dangerously close to none.

When the perfect home entered the picture

For a few weeks, I trolled Zillow with the unbridled enthusiasm and commitment of a high school girl combing through profiles of sorority actives before rush week. I was determined to see things the moment they were listed, and I turned on every possible push notification the Zillow app offered. My phone was like Grand Central Station for 3BR rentals.

We applied (and got turned down for) a cookie-cutter mega-mansion about 10 minutes away from town, and I was really disappointed. Having been burned once, I felt even more determined to pin down the perfect place – that’s when I spotted the most charming (yet renovated!) home with a literal white picket fence. I opened the notification moments after it was posted. The owner must’ve thought I sat at home constantly refreshing the results page (which wasn’t far from accurate).

Soon after, I spotted the fact it was about $500 more per month than we had originally estimated we’d spend.

But much like the aforementioned sorority hopeful, I threw caution to the wind and applied immediately.

That night, I had a call with the owner.

The hemming, hawing, and spreadsheeting that followed

After one phone call, we had been deemed worthy of renting this magnificent turn-of-the-century home. It felt like I had been knighted by the adult gods, and I floated around my 2BR apartment suddenly feeling cramped. I can’t wait to have an upstairs! A wrap-around porch! A front yard!

It wasn’t until I got the lease and saw, “Monthly rent: $3,000” in writing next to a line where I was supposed to sign my name in a legally binding agreement that suddenly I felt horribly, nauseously underprepared.

Laying in bed one night reflecting on how masterfully I had managed to make it through four years of living in a decently expensive city more or less unscathed by more than a few $9 vodka sodas, I had a panic-compulsion: You need to look at 2BR apartments there and see if you can find something more reasonable.

The money blogger in my head wasn’t happy with my Disneyland approach to this major decision.

After all, I identify as a frugal person who’s capable of making the best decisions based on numbers and numbers alone. I rail against people who let emotion creep into their housing decisions! I write articles with “HOT TAKES” in the title, where I weaponize compound interest calculators and bully people into ignoring the flash and stainless steel in favor of financial freedom.

I’m not the type of person who openly consents to spending $3,000 per month in rent.

The next day, I found a 3BR townhome 10 minutes north that was $2,400/mo. (after the specials, mind you!). It was a sensible blank slate. No charm, no character, and no white picket fence, but it was an insulated box with two stories that had never been lived in before. It would save us $600 per month (or, as my dumb brain kept insisting, $300 per person).

I went back and forth mercilessly, self-flagellating for pining after the home and convincing myself that I could be happy in the townhome with vague “middle of nowhere” vibes in the surrounding area. It all came down to identity, once again: “I’m not the type of person who needs a tree-lined street! Who cares that the closest businesses to the townhome are auto-repair shops and a 7/11? It’s FINE!”

And you know what? It probably would be.

But this time, I didn’t want to make the most numerically sensible decision – I wanted to optimize for happiness and experience, not the bottom line.

How I fleshed out worst case scenarios

The main concern I had through it all was how the picture would change if we lost a stream of income. It was only after worrying about it for days in the abstract that I realized I could literally sit down with a spreadsheet and calculate what the (realistic) worst case scenarios actually looked like.

And to be fair in my assessment, I also calculated what the (realistic) best case scenarios were.

I calculated what the house would cost as a percentage of our total take-home pay (if everything stayed the same) after taxes and 401(k) maxes: 22%.

Then, I calculated what would happen if we lost our highest-paying source of income and calculated the same post-tax, post-401(k) figure: 38%.

“Hm,” I grumbled, “38% is pretty high.” I had never allowed my housing to push 40% of my take-home pay before! Granted, that was post-tax income after 401(k) contributions, but still – I never wanted to cross the 30% threshold as a matter of principle. I didn’t want to be a weakling who fell victim to lifestyle creep.

But then again, I also had to consider that that was a worst case scenario calculation – could I live with that for several months if push came to shove? After all, it wasn’t like we were buying the home –  it was a 12-month commitment, and the likelihood that our move-in would coincide perfectly with us losing our highest-paying source of income wasn’t zero, but it also wasn’t high.

How my heart won out over my head

Moving to a new place where you know nobody is scary, especially when you’re going to work from home and don’t have the benefit of meeting new people in a new workplace.

When I finally went to Colorado to look at the two options in person, I drove down the tree-lined street and immediately saw how it would be the perfect landing place for our little family. Our German Shepherd needs constant exercise, and there was a massive park with a view of the Rockies right down the street. The yard itself would provide a convenient reprieve. At the townhome, by comparison, I realized we’d have to cross a busy main road to get to a green space – and the idea of doing that four to six times per day felt suddenly untenable.

I began to understand why people make emotional decisions about housing – because where you live (and how your home and the surrounding area supports your life) is emotional. Optimizing for happiness and a feeling of “home” in a new city where the risk of feeling isolated is high suddenly felt more important to me than the $7,200 we would save over the course of the year by choosing the cheaper option.

Sitting down with a compound interest calculator, I punched in “$7,200” as an initial deposit with an 8% rate of return over 10 years. How much is this going to delay my eventual retirement? I wondered. Am I still going to be able to retire early if we make this decision?

Do you know how much $7,200 turned into over 10 years (the retirement timeline I have left, if all goes according to plan)?

A little under $16,000.

And at the risk of sounding like an asshole, my response was, “That’s it?”

You’re telling me I’m going to have just $16,000 less in 10 years from now because of this choice?

Selling my car to even the playing field

The last piece of this puzzle worth mentioning was that choosing to live somewhere so close to town and to parks meant I could confidently sell my car. Somehow by the grace of God, I’ll have about $3,000 in “profit” after paying back the bank, since Carvana offered $17,000 and I only owe $14,000.

Monthly, my car cost me:

$316 for the payment

$112 for insurance

$30 for gas

$25 budgeted for maintenace

= $483

Removing the car from the equation bought back nearly $500 of breathing room in the budget, which made me feel a little bit better about opting for a home that was roughly $500 more than we initially set out to spend. Of course, we could’ve gotten a townhome AND ditched the car, but the net regain of about $500/mo. in vehicle expenses still felt like a weird permission to make an objectively less financially optimal choice. #balance

You can only judge decisions based on the information you have at the time

Someday I might look back on this and feel intense regret.

But for now, all I feel is excitement (and only a slight twinge of remaining nausea over the cost, but that’s natural, as I am MONEY with Katie, not WHITE PICKET FENCE with Katie, after all).

Lifestyle creep is a trap because it means you now have to work to support your expensive obligations and lifestyle – you no longer have the choice. When you live extremely cheaply and have a high save rate, you’re free.

But the flip side to always optimizing for money is that sometimes it means you’re not optimizing for happiness.

If the ROI on your money is going to be high (that is, your life will be substantially, markedly improved in a consistent, ongoing way), it’s not a waste. Not all investments have to be in the stock market – some investments are in your own mental health. And when it came to moving to a new town and working from inside the same new, foreign place every day, I wanted to give my mental health the best shot at success.

I wanted to optimize for happiness.

Note from Future 2025 Katie: It’s so fun to read this 2021 piece back now, because that house was absolutely the right decision, and it worked out better than I could’ve dreamt. It’s my favorite place I’ve ever lived and the memories we made there—especially after losing Georgia, our German Shepherd, in 2024—will always be invaluable to me.