Acceptable Types of Lifestyle Creep

You’ve heard stories of lottery winners who lost it all.

Not sure if you’ve heard a story about a lottery winner who became a billionaire:

Brad Duke won an $85 million jackpot in 2005. By 2016, he’d turned that fortune into a billion.


By spending his fortune wisely: $45 million into low-risk assets, $35 million into high-risk assets, and even creating a $1.3 million charity.

Did he not spend anything on fun stuff?

Thankfully, he did. From LADbible:

“There were some moments of extravagance, with Brad taking 17 friends to Tahiti for a big holiday. He also bought a load of bicycles, too.”

Just like how it’s possible to blow through a fortune, it’s also possible to spend money wisely.

Of course, this is an extreme example. Very few of us will ever have to manage such big money. But it’s a great question to ask:

When your income goes up, how should you spend your money?

Lifestyle Creep — The Enemy?

Perhaps the most common piece of advice you’ll hear is, “avoid lifestyle creep.”

It’s well-intentioned. The fear is the increased earnings change you — instead of being satisfied with a Toyota, now only a BMW will do. No more local travel — only international vacations. Like the extreme-case lottery winner who overspends, only to find themselves broke within a couple of years.

On the other hand, there’s an opposing view — which I’ve grown to appreciate as I’ve gotten older:

“What’s all the money for, if not to make your life better?”

Or, since we’ve been talking about extremes: If you only had one year left to live, would all that saved-up money mean anything?

Somewhere in the middle of the spectrum, I think there’s a reasonable place. Should you save and invest more1 as your income increases? Yes. Should you keep your desires reasonable? Yes. But should you use some money to make your quality of life better? Also yes.

If you started your financial journey as a broke college student like me, some lifestyle creep is inevitable. It’s good for you.

What are some types of lifestyle creep that are not only acceptable, but should be encouraged? I can think of a few:

1. Improving Your Health

Eating fresh, nutritious food. Getting equipment and groceries that’ll encourage you to cook healthy meals.

A good mattress you can sleep well on.

Investing into some form of regular exercise — whether it’s a gym membership, Pilates class, or a great pair of sports shoes.

All of those can be expensive. But incredibly valuable.

You can always earn more money, but you only have one body for the rest of your life.

2. Buying Time

The older you get, the more you realize how time is your most precious resource.

If there’s something you don’t enjoy, and can pay someone a reasonable rate to do it, why not?

You already practice that to some extent right? Maybe you do your own laundry, but you likely send your car to a professional for service and maintenance.

It’s not about being lazy. Rather, knowing how time is limited, focusing on the most meaningful things.

I can spend all day reading and writing. If I have to pay for cleaning services to free up my Sundays for blogging, I’ll gladly do it.

In an ideal world, what would you spend all day doing? What responsibilities currently block you from that, and could you pay to remove some of those?

3. Helping Others Around You

The world could always use more kindness — people who use their money to help others.

But the benefits of giving go beyond those who receive the help.

Philanthropy is the only act where the giver gets more than the receiver.”

I imagine an ideal life is where everything is aligned: you, your money, your money serving a cause you believe in, and your community.

4. Improving Your Quality of Life in Specific Areas

Anti-lifestyle-creep advice tends to generalize: “Don’t upgrade your car.” “Keep making coffee at home.”

I like to take a targeted approach. When you have money, upgrade things that are meaningful to you.

Because everyone has different priorities in life.

For some, building a library of books is the dream. For others, it’s traveling the world on business class. Meanwhile, most parents worry about their kids’ education.

I wouldn’t dare judge which parts of life someone wants to upgrade.

What I will say is, if you impatiently chase luxury in every aspect of life, no amount of money will satisfy you. By all means spend; maybe even splurge — but be conscious about what you spend on.

Ramit Sethi still has the best quote around this: “Spend extravagantly on the things you love, and cut costs mercilessly on the things you don’t.”

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The inverse question is helpful too. What type of lifestyle creep is bad?

If I had to distill it into a few words:

Spending money to try and impress people.

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  1. The easiest way I know to prevent losing control when you earn more: use a percentage-based budget. For example, if you were saving & investing 25% of your salary before, on your new income, you should continue with at least 25%. That keeps you on track with saving/investing/commitments, and now you can have fun with the additional earnings.

Pic from Pexels: Alex Qian

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