Tag Archives: lifestyle inflation

Life After The Joneses Moved

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The neighbors directly across the street from us moved last year in June (2010) to a much larger house.  At first, I thought it was a foolish move and that I was glad I was staying put since I had just paid off my house and I no longer have a house payment. 

I wish I could telly you that I’m doing great now that they are gone.  But quite the contrary is true.  You see, now I’ve changed my mind, I miss our neighbors, they were friendly, good people.  The couple that moved in are much younger than we are.  The new neighbors are in their very early 20s, and they don’t have any kids yet.  My son and daughter miss the old neighbor’s kids too, they all played so well together.

Since my neighborhood has changed, I’m feeling the urge to move to a location where there are larger houses and more land.

So what does my urge to move have to do with the Joneses? 

Well, I honestly don’t think I would be wanting to move as badly if they were still across the street from us.  Oh sure, I’d still complain about the small yard and the smaller rooms, but as long as I knew my almost similar neighbors were in the same boat, I don’t think I would mind.  In fact, I’m sure I would be pretty content knowing that I no longer any debt.

So now I understand why the average person want to keep up with the Joneses, after all nobody likes being left behind.

So what am I going to do about it?

Nothing for now.  I like not having a mortgage payment to pay each month!  Besides, my kids are still happy with the neighborhood, even without the Joneses kids to play with.  But they are missed!

-MR

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Debt Free, Now What?

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Back on February 2010, I became totally debt free, but now what?

I thought that there would be a period where I would break even for a while, and then start to plow about $1,000 extra each month into investments!  So now that it’s seven months later and how much extra did I save or invest?  Not a single cent!

So what’s the problem?  Why haven’t I been able to catch up?

Well it’s been a matter of bad luck with equipment breaking down and needing replaced and spending too much for our past vacation to Hilton Head Island!

But it’s also been a subtle form of LifeStyle Inflation!  Thinking back now, I realize that when wants would arise, I would just go ahead and buy it.  Yeah, I thought about it a bit, but I knew that I had the cash.  Then when our car and lawn mower broke down, I had the cash too…

So now will I begin my saving and investment regiment?  I certain hope so!

The only think that I’m worried about is the fact that my house is over 10 years old now, and it seems like things are starting to look a little run down!  I expect things to start breaking soon or later!

I decided to lower my expectations to only save and invest $500 a month.  Hopefully, I’ll be able to build back up to $1,000 though!  I plan on paying myself first this time.  That way I won’t have to feel guilty about missing my goal!

We’ll see if i can get my lifestyle expenses under control so I can accomplish my new goal!

-Don

Update 11/05/2012

Debt Free Now

Okay, the tide has definitely turned since I initially wrote about being debt-free now!  The excess in the amount of money I was saving dramatically increased after 10 months after becoming debt-free!  So I increased my 401k contribution up to 17% of my income, and still had a lot of money coming in.  So I also joined my employer’s ESPP to fund my Roth IRA.  Using my employer’s ESPP has been one of the best money moves I’ve made to-date!  Especially since I’m using my ESPP to save the money for contributing to my Roth, and since I’m using my Roth IRA as a Tax Shield, there is a nest of benefits that makes this an awesome wealth accumulation strategy.  Being debt-free now has enabled me to speed up wealth accumulation by at least doubt the rate that I was saving before I became debt-free!

Other Projects and Experiments:

Losing Control To Lifestyle Inflation

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Today, my wife and I sent the kids to a friends house for a sleep over, while we went to a fancy italian winery/villa style restaurant.  For just the 2 of us, the experience cost $120.00 dollars!

So what did we have to eat, you might be wondering?  My meal consisted of antipasta salad, sea scallops and red wine (Tuscano).  My wife’s meal consisted of steak, antipasta salad, rose wine and a small piece of cake.

Travel back in time 10 years ago, and I would have never paid for such a meal.  It would be way to expensive for me back then.  Even today, I can’t afford to have meals like this often!  Believe it or not, this is the most I’ve spent on a meal for the both of us.

So you might be thinking it’s a special occassion, but it really wasn’t.  It was just a new restaurant that we decided to try out.  We could have ordered the much cheaper pizza, but we wanted to see if this restaurant was as good as we heard it was.  So we ordered more expensive meals (but not the most expensive)!   The next time we go, we’re going for the pizza!!!

This is called Lifestyle Inflation, and it’s basically where we increase our upper range of spending whereas before we would never conceive of spending so much for such a temporary thing as a meal!

Maybe it is just a one time splurge, but maybe not!  I definitely need to get a better grip around my spending or else I’ll doom myself to never have any wealth someday!

-MR

Lifestyle Inflation Creeping Into My Life

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Okay, I confess, now that I’m debt free “Lifestyle Inflation” is creeping into my life!

Summer isn’t helping!  There are so many fun things to do in the summer!  Lifestyle inflation is where you do the same things, but more of them or you upgrade to a better version of them.  An example would be when you take your old 32 inch CRT TV (don’t laugh, I still have one) and replace it with a new 60 inch LED HD TV!  Another example would be instead of just going out to eat at your favorite restaurant (Olive Garden for my wife, Wasabi Japanese Steak House for me) once a week, you would go out more often, perhaps 2 or 3 times a week.

It’s especially easy to spend money on your children.  This is the current hurdle that I’ve been facing.  I need to buy a new battery for our ride on car so my daughter can enjoy the car too (like my son did).  The cursed battery cost over $50!!!

I guess I could stick to a strict spending budget, at least for the summer!  Then once winter comes back,  I can roll out of the spending budget since I naturally spend less…

What ways do you fight the urge to increase your “Lifestyle Inflation“?  Or do you succumb to it, but with balance?

-MR