The Creep Is Real
Today, I'm going to share the story of a friend. It's about his unique situation, but the same story plays out in millions of homes. It's the story of lifestyle creep. Lifestyle creep is a term that gets thrown around a lot, but today, I will give you a real-world example to shine a light on how destructive it can be. I will use round numbers for easier digestion.
Years ago, my friend and his wife combined for about $60,000 of annual income. It wasn't an abundant amount of money, but it was more than enough. They saved a bit for retirement through their work and had enough left to save about $500/month.
A few years later, the husband received a $20,000 promotion, and their $60,000 income was up to about $85,000 (including wife's pay raises). During that time, they moved into a better apartment and she purchased a new vehicle. They continued to save a bit for retirement and had enough left to save a few hundred dollars per month.
One year later, the wife received a $15,000 promotion, and their $85,000 income quickly increased to $100,000. He purchased a new car, and they joined a local country club. They continued to save a bit for retirement and had enough left to save about $500/month.
Fast forward about three years, and the husband took a new job that paid $30,000 more than the previous one. Combined with the wife's annual pay raises, and their combined income increased from $100,000 to approximately $140,000. They purchased a house and replaced both cars with nicer models. They continued to save a bit for retirement and had enough left to save about $500/month.
A handful of years later, they both moved up in their jobs and their income rose dramatically. In just those few years, their combined income increased from $140,000 to $230,000. They purchased a bigger house and began spending larger amounts of money on miscellaneous lifestyle categories (dining out, travel, clothes, etc.). They continued to save a bit for retirement and barely had enough to save anything each month.
That's when they called me. To the outside world, they were the definition of success. A large house, nice cars, fancy vacations, constant dining out. They had it made!!! Their reality, however, was much different. They continually stressed about money, their marriage was teetering (in part due to financial tensions), debt was building, they were way behind on retirement saving, they gave virtually nothing away, and they both hated their jobs. In other words, they were living the American Dream, er, Nightmare.
Can you relate? I'm sure many of you can, as this is a normal reality playing out in so many homes. This couple was earning nearly 4x of what they used to make earlier in their marriage, yet financial stress reached an all-time high. This is the destructive power of lifestyle creep. This is what happens when we pursue a life of more. This is what happens when we lose perspective.
Good news! It doesn't have to be this way. We can opt out of the American Nightmare. We can say no. We can take the path less traveled. I've been to the other side and am back to report it's amazing. Come join me!
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