Before we get started, let’s define lifestyle inflation (or lifestyle creep)? This is when we begin to earn more money and our lifestyle starts to become more expensive. For example, if we get a $400 a month promotion at our jobs, and then we trade in our car and get one that costs $400 a month more. Lifestyle inflation is a way of life for most of us. For the few of us that grew up poor, it is a must. We are not going to keep our kids in the same kind of house that we grew up in. So to a certain point, it is a necessary way of life. But at what point does lifestyle inflation start to turn into “keeping up with the Joneses”?. That is a question you will have to ask yourself. Let’s look at what minimalism is first and see if it can help prevent lifestyle inflation. Also, at the end, I’ll give my two cents on how to prevent lifestyle inflation from running rampant in your life.
What is minimalism? From the moneyunder30 blog,” Minimalism is all about living with less. This includes less financial burdens such as debt and unnecessary expenses. … For many minimalists, the philosophy is about getting rid of excess stuff and living life based on experiences rather than worldly possessions.” As I understand it, minimalism is the conscious effort to live with less. I also was reading about your total items need to be less than a certain amount. To me, that is a little ridiculous. Only you and your family can define what being a minimalist is. To the few of us who have spouses and kids, we have all gone through the “blow up” phase where the whole home is a disaster. The kids are young and we have toys everywhere to help keep them entertained. A lot of us have also gone through our different clothing, shoes, dress, purses, videogame phases. That is a part of growing older and wiser. It seems like the older I get, the more I appreciate every dollar earned.
So can minimalism help? Yes, making the conscious effort to live with less can help. It all comes to setting your own boundaries. For example, if you have a garage, tell yourself this is all the space that your family requires. Eventually, you will have to start purging items to keep the garage level in check. And once you start purging things, chancing are you will not buy more items. How about house size? Yes, once you become aware of space, time, and money constraints, you will probably start to look at the size of your house. Kris and I lived in an 1100 square foot house for 3 years when we were stationed in Japan. When we got back, our 1600 square foot house was huge. This is why we were able to rent rooms and start on our journey to become financially independent. If we had needed the space, we would never have the idea to rent out rooms.
Can minimalism help with spending money? Yes, it will become a total lifestyle makeover. Instead of buying a new car, you may see the value of holding onto your car for another year or two. For me, it is hard to spend money even though I have it. Kris and I have worked so hard over the last 21 years, but now we barely can spend money on ourselves. We just appreciate all the hard work that went into earning that money. We had our crazy spending days, but now spending money on the family is our main concern.
Here is my personal take on how to control lifestyle inflation. Every year you should be saving and investing more money. Period. If your income isn’t increasing each and every single year, you are doing something wrong. I am not trying to belittle anyone, but now is the time to seriously evaluate our lifestyles. As we get older, we should be becoming wiser. This means seeking opportunities around us. Cash flow is king. Cash flow is the leftover money between income and expenses. This number should grow each and every year. Which will leave you more money to save and invest. Remember, part of increasing cash flow is 1) paying down debt 2) reducing expenses 3) increasing earned income 4) increasing passive income. So 50% of building up our cash flow is right in line with minimalism. Reduce debt and lower expenses. This alone will stop lifestyle inflation. Once you are hyper-aware of your operating budget and cash flow, you will be in a better position to understand if lifestyle inflation is happening to you and your family.
In the end, minimalism is making a conscious effort to do more with less. This awareness will lead to making better choices and will be an important step in the wealth-building process. So the answer to the question “Does minimalism help prevent lifestyle inflation?” is a resounding YES.
Join our Facebook group at:
https://www.facebook.com/groups/231490384820780
Follow us on Pinterest at:
Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
Leave a Reply