In simple words, lifestyle inflation refers to the hike in our spending patterns as our income escalates. A surge in our earnings, such as a salary raise, a sudden windfall, or advancing to a better-paid job could compel us to elevate our lifestyle quotient. Maintaining a modest lifestyle despite an income increase could prove challenging for many.
Reflecting upon my past budgets, I noticed a drastic surge in my expenses as compared to the past. Despite the hike in our income, our savings and investment motives remain constant. To enhance my financial stability, it’s crucial for me to control lifestyle inflation by keeping my expenditure at a minimum and prudential.
I have decided to implement a few practical steps this year to control my spending and combat lifestyle inflation. These are personal steps based on my goals and what I perceive will help me keep my expenses under control. I hope these measures inspire others to devise their methods to combat lifestyle inflation.
ADOPTING A REVERSE BUDGET
My plan for this year is to adopt a reverse budget, a financial strategy I rarely pursued in the past. The reverse budgeting concept emphasizes paying yourself first. People often focus on meeting their immediate necessities as soon as they get paid, and whatever remains at the month-end is allocated for savings or debt repayment.
In reality, casually addressing our finances seldom bears fruit; we must have a comprehensive financial blueprint from the onset. If we fail at doing this, monthly surprise expenditures can leave our budget in a mess. My plan this year is to adopt reverse budgeting, setting money aside for investments and revitalizing our emergency funds as I receive my paycheck. The remaining balance will be used for monthly budgeting.
PRIORITIZING DEBT REPAYMENT
Adopting reverse budgeting should ideally facilitate my priority for this year – settling our debt. Following our house sale last year, a financially stressful and costly affair, we were compelled to use our credit cards for some expenses and also had to take out loans. My ambition this year is to relieve the accumulated credit card debt in the next few months, if possible.
This debt repayment could free up additional funds in my budget to further our financial goals. I have already structured a strategy for debt repayment adopting a debt snowball method and have begun proportioning funds from my budget for repaying debts.
STOP COMPARING, START COMPARISON SHOPPING
To overcome lifestyle inflation, you must refrain from a comparative approach to others around you. Competing or keeping pace with societal standards will eventually cause a financial burden. Personally, I adopt a skeptical approach towards social media and focus more on my personal goals and family.
Instead of rivaling with others, switch your stance to cost-saving measures at home. Online platforms and mobile applications provide comparison shopping opportunities and amazing deals, typically saving money.
MORE DUMP AND GO CROCKPOT MEALS
Though we do not dine out frequently, my aim this year is to further minimize dining out expenses by planning regular meals and opting for easy recipes. My goal is to spend less time preparing meals, i.e., 20-30 minutes, including the prep time.
‘Dump and go’ crockpot meals fit perfectly in this equation by aiding us in preparing larger dinner portions within a few minutes. Turning the slow cooker to low setting in the morning guarantees a warm, home-cooked dinner by evening.
FOOD CANNING AND PRESERVING
In addition to aiming for simple home-cooked meals, I plan on canning and preserving food. This could help our household save money. I have begun this venture by watching YouTube videos and reading books on the topic.
The origins of canning might date back a few generations, but this method can lead to huge savings in the future.
DECLUTTERING EVERY QUARTER
Decluttering can help you stay organized and serve as a potent tool to control lifestyle inflation. It provides a clearer insight into your possessions and potential purchases.
REDEEMING TRAVEL REWARDS
I plan on using up my remaining travel rewards from the past years. While reducing our credit card usage and debt are our goals, I continue seeking sensible travel deals that can complement our financial strategies.
LOCAL FREE AND FRUGAL ACTIVITIES
Even while controlling lifestyle inflation, there’s room for fun. There are numerous free local events and attractions which can be enjoyable without blowing the budget.
In conclusion, if you aim to curb lifestyle inflation and minimize spending, adopting sustainable and lifelong habits might be the most effective way. Numerous strategies can help save money – pick out the ones best catering to you and stick to them.
