I didn’t experience lifestyle creep; I experienced lifestyle acceleration. I recently found an old pay cheque from seven years ago. It was my last pay cheque from working in the UK before I moved to Asia. I put it next to the following month’s pay cheque I received when I started my new job. I had jumped from $1600 USD one month, to $5000 the next. It’s safe to say there was no ‘creep’. This coincided to a move to one of the most expensive cities in Asia. This felt more like being hit with a lifestyle sledgehammer.

In my experience, lifestyle acceleration has three stages:

1. This is too good to be true. When you put your last month’s pay cheque next to your new one and see the difference is several thousand dollars more, it can be a bit overwhelming. In my case my pay literally tripled. It’s not that it didn’t feel good, it did! But it didn’t feel secure. I felt incredibly lucky, but I also felt like it could all disappear again as easily as it had come. In reality of course, it hadn’t been easy. It was the result of working incredibly hard for many years, but it still felt like luck because it was so sudden. It felt more like a lottery win. It happened so suddenly my lifestyle didn’t change much. I was still very cautious with my spending. Added to that was the fact that I’d just moved to a new country so I was especially worried about additional and unforeseen costs. I knew the cost of living was going to be much higher, so even though my pay was high, would I still be able to afford to live comfortably? At this stage of lifestyle inflation I started to spend more, but I was still living well below my means.
2. This is great! After a few months I got more comfortable with spending more. Yes, everything in this city was more expensive than I was used to, but I realised that my pay cheque more than covered it. I also saw the kind of lifestyles my colleagues had and unconsciously started to emulate them. Being in a new country meant I learned where to eat, drink, shop and socialise by being invited out to places by colleagues. This meant I tended to go to more expensive places but I thought that was normal. I learned that $10 for a beer and $50 for a meal was ‘mid-range’. In my first 2 weeks my colleagues held a ‘welcome the new staff’ buffet lunch at a 5 star hotel costing $85 per person. I was shocked by this during my “It’s too good to be true” phase, but I quickly adjusted to thinking this was just what things cost. I was living a new lifestyle and I loved that I could afford 5 star lunches, spa days and fashionable cocktail bars.
3. This is crazy – I can’t spend this much! Even with the expensive lunches and bars I found that I earned more than I needed. There are only so many times a month you can go for a mani-pedi, and only so many weekends you can spend going to champagne brunches. I still had money left over, and each month it was accumulating. What do people do with this spare money? I had a few options here. I could have inflated my lifestyle further. Lots of people go down the wellness path, getting a nutritionist, a personal trainer or two, multiple gym memberships, an osteopath, an acupuncturist, booking wellness retreats. Or there was the option of overt luxury, moving to a bigger apartment, get a maid, become a member of multiple clubs, go on holidays more often, go on staycations, get a sports car. In fact why not do all of the above? For me the lack of security was still a problem. This was all great, if a bit extravagant, but how could I make it last? Living in a foreign country always comes with an element of insecurity, you ask yourself if you could live there forever, and if not, where will you go? This first encouraged Converse and I to save a significant portion of our pay. The aim was to buy property. Property felt stable and secure. Safe as houses. Like most people, we didn’t know much about investing other than to invest in property, although we’ve since reassessed our opinion about that.

Overall, having a sudden pay increase probably left me less susceptible than some people to ‘lifestyle creep’. Having a very obvious, very sudden change in income, lifestyle and location meant nothing crept up on me. Sure there are some choices I made that I regret, such as being too easily led by the lifestyles of others, but it doesn’t keep me up at night. If anything I think of it as a learning experience that led me towards making conscious financial decisions and setting targets for the future. When I really want to beat myself up I can add up my total earnings during that time and consider what I really have to show for it. I’m not going to though. I don’t want to lament every misspent dollar. The truth is I’m in a much more secure position than those who never realised spare money should be saved rather than used to elevate your lifestyle to a level of luxury that nobody really needs. When I think about it, security was always what I was striving for. Occasional luxuries with consistent security. And I think that’s something which FIRE will provide for me.