The Money with Katie Show The “Right” Amount of Lifestyle Creep (Plus, Revealing 5 Years of Mine)
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Mar 13, 2024 Exploring the natural inclination to increase spending as income rises, the podcast delves into the complexities of lifestyle creep. Reflecting on the speaker's journey from indulgent spending to minimalist values, it navigates the balance between frugality and enjoying life's simple pleasures. The discussion emphasizes the importance of defining valuable expenses in alignment with personal values and provides a formula for responsible spending management.
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Lifestyle Creep's Insidious Nature
- Lifestyle creep is the insidious enemy to financial freedom, often used interchangeably, whether constructive or detrimental.
- It's why people may not save more as they earn more, sleepwalking into more expensive habits while enjoyment remains stagnant.
Katie's Evolving View on Spending
- In 2018, Katie Gaddy Tossan focused on small discretionary purchases like muffins and tops, viewing them as mindless spending.
- Later, her focus shifted to bigger purchases, like homes and cars, realizing the earlier restrictions were unnecessarily harsh, especially given her income.
Spending Guidelines
- Define your values and spending preferences.
- Use the "Don't Live Beyond Your Assets" formula to scale spending safely, considering both income and invested assets.