of $100,000 a year or higher say they're living

paycheck to paycheck.

This may be the result of a sneaky behavioral

phenomenon called lifestyle creep.

Lifestyle creep is the common pattern of making a

little more money and starting to spend a little

bit more money. It happens almost

automatically. I think people hold these

benchmarks in their mind.

If I reach this position or I get this promotion or

I make it to this age, then I can live this life,

or then I deserve to have these things, and then

they kind of go a little crazy or go a little wild

on it, and then it becomes like a trade off,

like they only can enjoy their present happiness

and they're not able to save or plan for the

future.

There's nothing wrong with wanting nice things.

The mental, emotional reason why we want to

acquire more is generally rooted in this need for

your perceived value.

We live in a world where the nicer car you drive,

the higher your perceived value is.

Six out of every ten people surveyed said that

paying for everyday expenses negatively

impacted their mental health.

It does take a lot of joy from just life and always

being in this scarcity mindset when there isn't

necessarily a scarcity to fear.

Here's why Americans feel like they're constantly

struggling to keep their paycheck, even when they

start making more money.

Say you get a new job and you have a little bit of a

pay bump, suddenly there's a little more room

in your budget. You know, maybe you do some small

upgrades, like you eat out rather than cook at

home, or buy those Taylor Swift tickets or upgrade

your music subscriptions.

Anything like that is an example of lifestyle

creep. It's just these little upgrades that are

very hard to undo financially or even

psychologically once you've made them.

A lot of people have this scarcity mindset around

money, and they spend so much of their lives

saving, saving, saving.

And so there can be this point where if you're

constantly saving your whole life, and then you

finally reach this marker of financial success, or

you finally reach this big paycheck number, you

feel like you finally deserve to enjoy your

life.

The idea that people save and they just hit a point

where they feel like they deserve it.

I fully disagree with that.

Most people don't have $1,000 in the bank, like

most people cannot handle a tire blowout, or they're

going to put it on credit. There is no

financial literacy, no financial education that

happens. The average person does not think

about lifestyle inflation at all.

I think it's something that's not even on the

average person's radar.

Coming out of the pandemic, there was a

strong desire to go out and splurge on

experiences, maybe take a trip.

This is often referred to as revenge spending or

revenge travel.

Research shows that young adults are particularly

susceptible to this.

They feel discouraged by higher prices and making

ends meet, so they might feel like they'll never

have enough money to retire anyway.

They might as well enjoy themselves now, unlike

perhaps their parents were, young adults need to

be more responsible for their retirement because a

lot of the safety nets that maybe their parents

had, like a pension, no longer exist or are

extremely rare, so they need to contribute to

their own 401k if they want to shore up their

financial security.

There's something about spending a little more

than we should that can feel like rebellious or

bad, and it often can be a reaction to our family

culture around money, or parentified or

internalized rules around what we can give

ourselves. And some people might overspend as

like revenge against these rules, and some

might look at someone who's overspending and

think, and kind of label them as all bad or all

good. And there can be a lot of guilt and anxiety

around the consequences.

Spending is a way for us to meet one need, one

another isn't met.

I was 19 years old when I entered my first corporate

job. I was still figuring out how to adult as well

as how to be in this corporate world, make an

income, which for sure led to overspending.

I was sad, so I would shop.

I was getting serotonin through shopping.

And then that led to me accumulating over $30,000

of credit card debt, and I had to figure out how

the heck I was going to pay that off.

When you're spending is dictated by emotions or

depriving yourself or holding back your needs,

that's when it becomes problematic.

I generally like to think of lifestyle inflation in

sort of two buckets. You have like your general

idea of what lifestyle inflation is, which is the

buying fancy cars, the buying nice things along

those lines. And then there is lifestyle creep

that's more like regular everyday things that if

you're living paycheck to paycheck, you're going

without, like going to the dentist, getting oil

changes on your car.

Right? There was a time in my life when oil change

was just like, not even a priority.

Like I'm trying to keep tires on my car.

I'm trying to keep it running. I'm trying to

keep the registration paid. I'm not concerned

about an oil change, right?

More than 60% of Americans live paycheck to paycheck

as of September 2023.

That, along with inflation, can have

serious financial consequences. Many

Americans also don't have emergency savings to fall

back on. 63% of workers say they wouldn't be able

to cover a $500 emergency expense.

You know, there's that saying, 'being poor is

really expensive' because then when it is time to

get basic maintenance on your car, it ends up being

way more expensive than you were planning on it

being because you haven't done basic maintenance.

And that can go well beyond car trouble.

46% of Americans said they have a balance on

their credit card because of an emergency expense,

according to a Creditcards.com survey,

10% coming from car problems, 11% to cover

unexpected medical bills and 10% for home repairs.

Because of inflation and higher prices nearly

across the board, people have been having a harder

time making ends meet, and often that means

turning to credit cards to fill in the gap between

what you need to buy and what you can actually

afford. Credit card rates are over 20%.

That's the highest interest that you'll

likely find anywhere unless you're getting a

payday loan. Credit card debt can really spiral out

of control, and pretty quickly.

The solution to get what you need when you're in a

position when you don't have it, it really is to

just make more money.

It sounds like a simple solution, but it also

sounds like a condescending one, right?

You tell somebody who is doing the best that they

can that they need to make more money.

The solution to make more money isn't really

realistic.

The experts that I talked to said, it's okay to

treat yourself as long as you've built in a buffer

in case something comes up and you want to be able

to find that balance between enjoying your life

and your emotional well-being and your

financial well-being.

Marbrisa Flores describes herself as a recovering

supersaver.

I would describe a supersaver as someone who

maybe is now in a position where they do

have some sort of income, some sort of stability,

but it's a certain mindset that keeps you in

scarcity mode and afraid to spend on things that

you may need or want and kind of affect your

lifestyle in that way.

My way of saving it was to hoard it.

And the tough part is that saving for the sake of

saving, it's not very reinforcing, but it can

kind of be addictive.

And there's momentum in that.

I wouldn't advise going to that extreme.

It does take a lot of, I don't know, a lot of joy

from just life and always being in this scarcity

mindset when there isn't necessarily a scarcity to

fear. After working with a wealth coach, I

continued to save because I was still very kind of

would put me at ease in that scarcity mindset.

Like I felt at ease having kind of my savings.

I continued to save money, but in a more

intentional way, with the intention being of

spending it.

When you're in scarcity, you're feeling this

anxiety. My first thing that I like to tell

individuals is forgive yourself for what you've

done in survival mode.

I think I like to divide it between, you know,

what's essential, what's, you know, an actual bill

type of expense versus a lifestyle.

What's a choice that you take on to spend money.

For example, a choice to go out drinking and having

fun, but there's also not the choice you have to

make that car payment. You also have to put gas

in that car for it to go, right?

So there's things that you can't avoid and

there's things that you have a choice to do and

you can adjust.

Value-based spending is what I teach.

And it's where you sit down and you really

evaluate, one, where am I spending my money right

now, and am I being reactive, or am I being

proactive in that?

Am I spending my money in places that really have

value for me, or am I spending my money in

places that I think I should be spending my

money because of outside influences?

And once you have an idea of where your money is

going right now and looking at am I aligned

with this? Is this something that I actually

value?

The goal here is to find balance.

It's about finding ways to spend in the moment,

and also how you want to spend your money in the

future. So it's about enjoying your life, but

not being so focused in a future that hasn't come

yet or too much focus on the present.

The idea is having your cake and eating it too.

You can have bites of your cake right now and

then save some cake for later.