I WILL Partake in Lifestyle Inflation

Michelle over at Sense of Cents recently had a great post about how she’ll never be a frugal blogger and I appreciate her honesty. I know she’s not alone and, as I commented on her post, I completely relate to what she’s saying. I’m here to say that I will be partaking in lifestyle inflation when our debt is paid off.

While I don’t mind living a super frugal lifestyle while we’re in debt repayment mode, I will not be floating through the rest of my life like this, never really enjoying the money hubby and I worked our butts off to enjoy.

I’m not saying we’re going to start spending beyond our means and not prioritize our financial responsibilities like our daughters educational savings or our retirement. What I am saying is that when we become (non-mortgage) debt free we will:

  • Have a dedicated vacation savings account and see the world however our vacation budget allows.
  • Buy a second car. To save money I currently take public transit (about 1hr each way) to work. I could drive it in at least half this time but would have to spend money on gas and parking. It doesn’t have to be fancy but something reliable. If my dream of working from home ever comes true, this may change again.
  • Give ourselves more personal spending money. Currently we have close to nothing in this category. I actually felt sort of crappy about spending $10.00 for my facewash last week. It’s ridiculous that I feel this way and want to know we each have a little spending money each month for whatever we want- clothes, facewash, coffee, whatever we want. Again, I deal with the deprivation now because it’s short term while we pay debt off.
  • Buy a bigger home. I did a whole post about this last week but we are already at our homes  full capacity. Yes there are things I could get rid to gain a little room like the storage space under our stairs which is jam-packed FULL of camping stuff? We enjoy that stuff. We need more room.
  • Increase our grocery budget. This is sort of a necessity since food prices keep going up and our family is growing but we need to up the budget by probably $25.00/week.
  • Spend more on hobbies. Maybe this will come out of our personal spending money, maybe not. Hubby and I both have hobbies that we enjoy but other than blogging (for both of us) we haven’t done much of it. Hubby’s loves to golf but it ain’t cheap!
  • Get a rec-center membership. I say rec-center rather than gym because it has a pool, skating rinks, tracks, fitness, dance, lifestyle classes, library you name it this place has it. I had a membership here through my mom’s family membership for over 15 years and loved it. Now that kiddo is here, I want to re-join in a few years so we can do family stuff like swim, put her in classes (swimming lessons, dance) and use the gym again. I loved it when I was there. Bonus for us here in Canada? We’re allowed to tax deduct a portion as a child-fitness tax credit- an incentive the government has to encourage families to keep kids active.

Budgeting is about financial responsibility, not necessarily living on bare bones. Some people choose to live this way though in order to fatten up their retirements, vacation funds, whatever. It’s not for me. I want to live my life to it’s fullest because, as we all know, we can’t take the money with us when we die.

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  1. We are also on a very tight budget, but even once our debt is paid off, we need to play catch up with retirement and college savings, so we will be on a tight budget for awhile.

    However, I agree, it is good to enjoy some of your hardwork, especially after paying off debt!

  2. All the things you mention are actually pretty reasonable (not “I will build a closet and will it with 1,200 pairs of shoes”) and money is here to be enjoyed! Especially if a car can mean you spend 1 hour more around your family, or if the fun money helps you not agonize over every little purchase.

  3. Pauline thinks my closet dreams are crazy? hahaha. I kid. Here’s hoping that the frugal part wins out for awhile longer, so you can get your debt sorted and earn some of those lifestyle inflations 🙂
    Does your library have a fee? My friend and I were just discussing that, apparently they do in Alberta.

    • Nope, all our libraries are subsidized 100%! and yes, I will remain frugal until the debt is gone!

      • l have to continue to be frugal after my debt is gone. As a late 40’s single mom fun is the very last item in the budget and there is usually no cash left for it.

        As soon as the debt is gone and my sons are done university I will start two new lines in the budget. One for travel and the other for fun and self-indulgence.

        Always thinking about the debt and worrying about the debt and trying to make more money to pay debt or squeeze the budget a little bit more is tiring and I will be very ready for my first vacation in over 12 years.

  4. K.K. @ Living Debt Free Rocks! says:

    I’m on the same train you are on Catherine. I like the idea of the rec-centre membership as you’ll get a lot of value for the money you’ll spend. The first thing I did when I became debt free was to increase my personal spending money in my budget. Let me tell you that I enjoy having the money to spend it on whatever the heck I want; and not feel guilty about it anymore!

  5. When we finally graduate and have a decent income we are going to increase our lifestyle for sure, but I don’t call that lifestyle inflation. Inflation is unconscious and undirected and we are going to be deliberate!

  6. I hear ya! Once I’m out of debt, I’ll be putting a portion of this extra cash towards retirement, but the rest is probably going to go towards a combination of saving for a house, travelling, and lifestyle inflation.

  7. I agree that it’s very much about balance if that’s possible. For some people it probably isn’t unfortunately. That’s why I wrote the post about where I live..because I’d like a little more discretionary spending than I already have. You can’t live a “life” on just penny-pinching, and you can’t live a life spending like crazy with no responsibility. Good post!

  8. PS I like the new look!

  9. Thanks for mentioning my post! And I’m of course with you on this 🙂

  10. Traveling is a great idea. Another car, probably not. Buying another car will increase your monthly spending quite a bit. I think it’s fine to loosen the purse string a bit once you’re out of debt. Good luck!

    • Oh I know that, which is why we only have the one vehicle for the time being but as it stands right now with the directions we currently travel to work (and we won’t be changing jobs anytime soon, if ever) and as our family continue to grows and starts moving in even more directions (schools, dance etc etc) it might be necessary.

  11. I say that what is the point of making money if you are not going to enjoy it? Yes, I lived very frugally when I was paying off my cards, but now I am enjoying the money I make. Why the hell not?

  12. Ha…with you all the way; especially considering my recent car purchase 🙂

  13. *high five*!

    I love lifestyle inflation… to a point. I think the things you listed are reasonable. As my income increases all I want is to travel more =) So far that’s working out (typing this from an airport)

  14. Agree wholeheartedly. Money is gift and should be enjoyed, responsibly. Once you’re living debt-free, you should enjoy a higher a standard of living. I know people who are very wealthy and miserable. And I always wonder – what’s the point? Money should allow you to do the things you love and be shared with people you love.

  15. I think your “lifestyle inflation” is pretty reasonable. So long as you don’t get back into debt and you’re living within your means, then by all means, up that grocery budget! Join a rec center! I”m with you on that one.

  16. Right on, Catherine. I’m going to even take it a half-step further. I’m frugal while paying off my consumer debt in that I’m living within my means taking into account the payment I make to my Debt Management Program. Could I possibly cut more corners, pay extra into my DMP and get done faster? Yep. I take full responsibility for the actions that got us under a mountain of debt. I’m on a plan that will eliminate that debt, and I’ve got just over a year left. We struggled and struggled through the first 3.5 years of the program, and just now with some income increases are we breathing a little easier. I’m not giving that comfort up to be done with my DMP 1 or 2 or 3 months earlier. The breathing room for the next year is worth more to me than that. There are some people that think those in debt should live in a cardboard box, and live off of bread and water until they’re out of debt. They preach that the name of the game is wealth building, and we should all be scrimping and scraping by amassing wealth until we can give the middle finger to our 9-5, retire, and THEN enjoy the fruits of our labor. Well, I’ve got a different perspective than that…..if watching their retirement accounts grow is their goal, then more power to them. For me, I LOVE my career, and don’t really have any aspirations of leaving it – and life doesn’t begin at retirement. I’m not waiting until retirement to enjoy a tropical vacation, or enjoy my dream of running a marathon in Hawaii. Different perspectives for different people. 🙂

    • I couldn’t have said it better! Hubby and I also really enjoy our careers and we’ll likely stay in them for as long as we need to. I’ll likely cut back as our family grows to dedicate more time to it but not until we’re financially stable. The way I see it as long as I’m addressing my debt responsibly I’m going to enjoy my life too!

  17. To each their own.

    Some want to live very frugally to save and become double-digit millionaires.

    Others, less so.

    I like to think of myself somewhere in the middle, leaning more towards the saving end.

    I like spending my money, even if it isn’t (at first glance) frugal to buy $500 worth of really nice pots and pans (my half) to last us the rest of our lives, it is something that’s important to us (we cook a lot), and I can afford it, having already amassed $200K in savings on m own.

    Personal finance is personal. As long as someone is out of debt, there’s no harm in upgrading your life a little.

    • Exactly and I’m not saying I’ll be spending all of our ‘new found money’ for inflation, we will also be seriously boosting our savings as well. I just want to enjoy life a little more, worry less. And I don’t think $500 for pots and pans you’ll likely use the rest of your life is wasted money either. Some things require upfront cost for long term gain/usage.

  18. All I want to say to this post is AMEN!

  19. I really liked your post! As someone who just sold their car to pay off some debt, I cannot wait for the day when I can just enjoy my dollars instead of fretting over them 🙂

    • Thanks so much! And I totally understand what you’re saying! We have a longgg way to go but it’ll be nice 🙂

  20. I’ve always said that you have to be reasonable when living your life. You can’t deprive yourself of everything because you are going to snap and go crazy. It’s great to splurge as long as it’s in moderation and your budget can handle it.

  21. Now that our student loans are paid in full we definitely spend a little more freely then we did. I see nothing wrong with enjoying yourself a little (or a lot, to each her own) once you’re debt free. Like you said, you can’t take the money with you and you should enjoy it a little while you’re still young/healthy enough to do so. It would be sad to spend your whole life saving for retirement then god forbid pass early and never be able to enjoy everything you worked for. As will all things moderation and common sense are the keys.

    • It would made me so sad to save, save, save only to have something happen to one of us and not be able to enjoy it. Like Travis said, life doesn’t start at retirement.

  22. I totally agree with this post. Frugality is about being thoughtful and deliberate with your spending, not just being a cheap ass. I save in some areas so that I can spend in other areas I love!

  23. You go girl! It’s all about value-based spending. A warning about the bigger house: it seems that no matter how big our house got, we always eventually had stuff enough to fill it up. 🙂

    • Thanks for the tip! We don’t want a much bigger home- one more bedroom for future kids and proper storage, since the only storage we have outside of normal closets is the crawl space under our stairs.

  24. Great post! It seems a lot of the blogs I read post budgets that are really extreme. We go through periods of being extra frugal (Mat Leave) and now with our move and all the extra costs of a new home. As I look at “Gail’s” recommendations, we are way under budget for most categories…but re-allocate the surplus to our “Life” budget! We enjoy eating out at restaurants and taking vacations! I agree, it’s all about balance.

    • Same for us. We like a nice meal out and travelling too which hasn’t been a priority but will be for sure. We were lucky to see quite a few amazing places.

  25. Hi Catherine!
    It has taken me a long time to figure this out but I’ve discovered it’s all about balance. Too much of anything is not good for you. I like your priorities after your debt is paid off! Definitely something to look forward to!

  26. I thought you were going to say something like “Taking a $20,000 trip to Vegas and then putting $10,000 rimzz on my new HUMMERZZZZ!!!” Your “lifestyle inflation” is reasonable, planned out well, and not wasteful. And heck, it’s your perogative (Bobby Brown!), so why not?! I don’t see you forgoeing retirement savings and getting back into debt, so this is a non-issue.

    GO HAVE FUN YOU CRAZY KIDS!!! (Wow, I sound like an old man….)

  27. There is nothing here that I would say is too crazy! Actually, it sounds like a pretty nice life to me. When will you be debt-free!?

  28. Like everything in life there are degrees and this applies to frugality as well. While I would never presume to tell someone how to manage their finances I do think setting aside funds for my children’s college education, wedding, my retirement and an emergency fund should come before a trip to Paris. Once I have those items taken care of then of course splurging is a non-issue. Living a frugal lifestyle allows me to do more with what I have not less!

  29. I love the honesty, and am mostly on the same page. We certainly have cut a lot of corners during our debt-reduction phase, but I don’t ever claim to be a lifetime frulgalisto. Our house too is near capacity and while it would be the smartest financial thing to do to stay here and tough it out, we are constantly talking about finding a bigger home.

    • Where people can go wrong in terms of home upgrading is crossing the line of reasonable increase in home and way too much home. I don’t want too much more home (especially to clean!) I just want more storage space and a little more room for our growing family.

  30. lifestyle inflation is a wonderful thing. Sadly I haven’t had much inflation.

    The first things I added: nicer food and booze.

    What’s next: upgrading my antique computers, and a PROPER coffee grinder.

    After that?

    The sky’s the limit.

  31. A layoff several years ago force a total review of what we’d been spending. We weren’t spending beyond our means, but boy was there a lot of waste on stuff we didn’t really care about. For the short term we cut out every single non-essential item. Turns out we could live on 55% of our pre layoff combined income. A new job was found within 2 months and the severance (which we didn’t need due to the spending cuts) actually put us years ahead on our retirement savings. That layoff was the best thing that ever happened to us. The blinders were off on how much we’d been wasting and we never went back to our old spendy ways. Five years later we still live on that “layoff budget” with the exception that we’ve added in an annual holiday with the kids. It’s the one luxury in our frugal lifestyle. We don’t feel like we’re missing anything because everything we cut out wasn’t important to us to begin with. We were just spending mindlessly because we could afford to. Now, even with the annual trip, we are planning to retire in our late 50s. Before the layoff we were wondering if we’d be able to retire at 65. We should have the mortgage paid off in about 3yrs and be totally debt free, but I don’t foresee any lifestyle inflation as a result. The plan is to simply redirect those mortgage payments into a special Retirement Travel account, totally separate from our normal retirement savings which will cover daily living expenses. We’ve already saved enough for retirement from 65 onward. Now we need to pay off the mortgage, build the travel account and enough extra savings for the years from 58-64. Travelling now means we don’t feel like we’re suffering, but boy am I looking forward to retiring early.

    • That’s amazing! Me going on mat leave was one of the best things that happened to us as well. We too realized how much we were wasting and how little we actually need to survive. It was a great forced perspective.

  32. I agree; that doesn’t sound too much like lifestyle inflation if you’re being deliberate.

    I know that when our income is stable and our debt well on it’s way to gone, we’ll be living a downtown lifestyle. Nicer apartment, close to transit and restaurants, etc. We don’t envision ourselves as suburb people, don’t want a house (or maybe even a condo), and would prefer to have one car, at most.

  33. Frugality is a means to an end. No one gets rich being frugal, but the powers of frugality can help you pay down debt, build up savings, and make a career change, house change, or lifestyle(travel/gym) change if you want too)

    • Yes and no. It depends on how much waste was in your life before to went frugal. It depends on how you define rich. It also depends on your age to some extent. Cutting back to generate $100/mth won’t make a huge difference to your retirement savings if you are already 55 when you start. On the other hand if you do that at 20 and keep investing, then being a little frugal while have an enormous impact on your future financial wellbeing.

      We went from 15% of our income going to retirement savings and no extra mortgage payments, up to ~40% of our income going toward retirement and extra mortgage payments . Planning to retire debt-free in our late 50s with a substantial travel budget sure feels “rich” to me. Not Bill Gates rich, but very comfortable and with plenty of travel money.

  34. Love it! Have fun spending if you are resolute about it. NO one wants to be a hoarder. Thanks for the post!

  35. Even when I was paying off debt, my budget included money for extras like vacation and going out to eat once in a while. I see too many people have their lives cut short for me to not live while paying off debt.

    Now that all is gone except $45K in mortgage, we just upgraded those extras (nicer restaurant, bigger vacation, etc.). However, I still cut back on things that aren’t as important to me and use coupons.

  36. I have lived with public transportation too – it’s not fun. I used to catch 2 buses to work everyday and it took about an hour as well.

    We need to start saving.. We really have no cushion to rely on. This is why I am starting a new blog – countinpennies =)

    I would love to buy a home. My credit is not in good enough shape to do so. However, I’d still love to look. My cousin received the opportunity to rent to own on a beautiful home. I may get the same chance =)

  37. All of those seem pretty reasonable! I would love to have some lifestyle inflation at some point, but I can’t even think about it yet. Head down, power through…


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