“Lifestyle inflation” is the tendency we all have to start spending more as soon we earn more or save more (and sometimes even before that).
It’s so easy to fall for lifestyle inflation, but at the same time it’s easy to avoid it. Sometimes you have everything in place and out of nowhere you find more money laying around your bank account. What do you do with it?
Or often you don’t even notice this money laying around but you spend it anyway.
Why do we do that?
Because we like to feel we are “growing” or “progressing” in our lives or career. Because we think we “deserve” better. Because we are never happy with our life or our choices or whatever.
Because we want to keep up with the Joneses. We tend to only compare ourselves with people who is “doing better” than us, at least under our lenses. Nobody ever said “I am so happy because I have a better life than our neighbours'”. But a lot of people say “When I’ll have the same car/house/pool/job the Joneses have, I’ll be happy”.
This is what we call “trying to keep up with the Joneses”.
I, victim of myself
Happens that, this month, our family has succumbed to lifestyle inflation. Here’s the story.
We’ve found an amazing person who cooks amazingly well, and she is starting a business to deliver frozen lunch. As with any change in our life, we sit and discussed the idea. We put everything on paper (including the emotional relief that stopping cooking would cause) and we evaluated that we would end up spending LESS in food than what we were giving the grocery stores every month.
That’s perfect, right?
Not exactly. There are human beings and brains involved.
We used to grocery shop at Maxi. Good prices and good mix, brands we like and trust, you know the drill. It’s not at walking distance from our home, but we had a “Maxi’s taxi” amount set up in our monthly budget, so we used to take the bus there and call a cab to come back. We’d spend no more than $10 in taxi fare this way.
Then there’s the Metro three blocks away from our apartment. It’s a fancy supermarket, with better fruits, better meat, better stores and presentation, bakery, fresh bread and everything else the money can buy. And here lies the problem: Metro is more expensive than Maxi. And it does not do price match, while Maxi does.
“Since we are saving money with the frozen lunch, we could take a look at Metro this weekend” I said, “just for the extras and out of curiosity“.
The first time was ok. We were delighted! Everything from the layout to the products felt more premium than Maxi’s counterpart. And so was the price. But it was just a test run, right? Picking up a Car2Go to go back home for 3 blocks felt wrong, but it was starting to get cold and we bought a bit more than what we would comfortably carry in our bags.
You already know where this story ends, right?
Fast forward some weeks.
After spending almost $100 in a “quickie” run to Metro, my wife told me “I think we should reevaluate this decision and go back to Maxi”.
I was happy with my new Metro life! People there looked richer. The products looked better. Even the employees looked happier! And then the month came to an end and my house of cards fell down…
Every end of month we revise and set our budget for the next period. We register every expense we had during the month into GoodBudget, and this way we always know where our money went and where we intend to spend it the next.
The results were crystal clear: we’ve spent more at Metro than what we’ve spend the previous months at Maxi, in average. This, plus the cost of the frozen lunches and our “food” budget was blown away.
The mere idea of saving money with the frozen lunches trapped us into thinking we could afford an upgrade to Metro. And maybe we could, but we’d have to check and recheck our current lifestyle and the way we shop at the supermarket.
Is it nice to have baguettes for breakfast? Surely it is. Do I need it? Surely not. We have a bread machine that makes perfect loafs, and everybody loves them! Does Coke from Metro tastes any better than Coke from Maxi? Absolutely not.
This month we’ll go back to Maxi to continue the experiment. But one thing is granted: the frozen lunches are here to stay!