What “Lifestyle Inflation” Means & The 2 Ways I Let It Get Me

lifefstyle inflation

Correct me if I’m wrong, but I feel like “lifestyle inflation” is one of those terms that most people generally understand, and yet have a hard time producing concrete examples of (see also: opportunity cost). It’s easy to discuss and understand in the abstract, but when it comes down to identifying examples in your own life, it suddenly becomes much harder to suss out.

The term “lifestyle inflation” refers to the increasingly expensive spending choices we make in our overall lifestyle as our income rises. Lifestyle inflation can come in many forms. The changes are often minor at first, but they can snowball together in a way that makes you feel like your level of disposable income maybe hasn’t changed all that much — even after a $10k pay raise. Unsurprisingly, recent college graduates can have a particularly difficult time adjusting to a new standard of living — which, considering the way we’re not taught about how to handle money, is totally understandable. When you’ve been living like a student for four (or more) years, how can you tell what’s normal? Now that you’re an adult, what’s expected? What’s a luxury? Are you supposed to spend X amount on a business casual wardrobe? Should you switch to more expensive but locally-sourced food products? Stop sneaking into your ex-boyfriend’s dad’s HBO account, and pony up for your own?

I can’t answer these questions for you, because personal finance is (plot twist!) incredibly personal, and what’s right for one person may not be right for another. But I can share my own experience with post-grad lifestyle inflation and the sneaky ways it expanded my own spending without my ever realizing. Here are two specific examples from my first ten months post-grad.

1. Fitness. 

Fitness is a large part of my life: I work out in some capacity nearly every day. I have always loved working out and staying active, and I do so with a variety of different activities. For the last several years, I have been going to the gym, boxing, and attending Bikram yoga with some regularity. A gym membership (to a nicer gym with a punching bag and speedbag) and a yoga pass are not cheap, but I’ve always worked them into my budget because, to me, they are non-negotiables. But when I began full-time work and suddenly had much more income, I started flirting with other opportunities. I started taking barre classes, and used day-passes at my friend’s rock-climbing gym. I even started researching boxing gyms in my area, even though all I really need is a punching bag and some open space.

It was easy to justify any extra fitness expense, because hey, it’s fitness! It’s good for you! But those extra costs add up. Barre is expensive. At the studios closest to me, one class will run you $25, and you don’t get a bulk discount unless you buy more than 10, which expire in three months. With rock-climbing, $20 day passes + rentals add up, and the monthly pass isn’t worth it unless you can make it there at least 3x a week. It was the same story at boxing gyms: because I was looking for ways to shake up my workout routine once or twice a week — not trying to overhaul my whole regime — continual drop-ins were killing my wallet, and monthly/bulk passes didn’t make financial sense, either. Once I realized this, I re-assessed my fitness priorities and came back to my personal holy trinity: boxing, Bikram, and old-school gym workouts.

Maybe fitness isn’t your wallet’s Achilles heel, but there’s still something to be learned here. Whatever your own hobbies, there’s something different about spending money on something you love, as opposed to shopping for new clothes or yet another boozy brunch with your girlfriends — but if you love those things, more power to you! But it’s important to keep in mind that just because you probably could spend a little more money on that hobby, doesn’t mean you have to. Your spending on activity X doesn’t have to rise proportionately with your income.

2. Grocery Shopping.

When I look back at my time as a student, I am amazed at some of the things I would do to save a buck: stuff the dorm washers to bursting to avoid paying for two loads, haul fifteen minutes across campus and sit through a mind-numbingly boring lecture just to snag free pizza, or happily mix cocktails with a dirt-cheap clear liquid (“vodka”) that was so repulsive it bordered on radioactive. But as I’ve spent more and more time collecting a regular paycheck, my internal time vs. cost pendulum seems to have swung much further in the other direction, which is most clearly evidenced in my food habits.

One thing I have always done well is reliably brought my lunch to work; while I work at a firm where many people eat out several times a week, I try to buy lunch no more than once every two weeks. I’m also pretty good about brewing my coffee at home, although I do allow myself to buy Dunks on Fridays. HOWEVER, I started making all sorts of concessions to convenience that were really adding up. To name a few:

  • There is a Whole Foods that is ultra-convenient for me, location-wise. This was probably the biggest mistake I made: who does the bulk of their food shopping at Whole Foods when there is a Trader Joe’s on the other side of the rotary?!
  • In college I kept a stash of Quest protein bars on hand when I was running late in the morning, or didn’t have time for a real meal in between classes. At $25 for a box of 12, they’re not cheap, so I tried not to rely on them too much in school. But I started buying them all the time post-grad — they’re just so easy if I don’t want to cook.
  • Chicken cobb salads are a staple in my work lunch rotation…and I started buying pre-cooked chicken strips and (wait for it) hardboiled eggs. Yes. I bought six eggs already hardboiled, for a higher price than a dozen normal eggs that I could just throw in hot water myself.

Shopping at Whole Foods was my most egregious error, but once I realized how many little ways I was throwing money away because of sheer laziness, I slashed my grocery bill down to just about $30 a week.  Once you graduate, it’s easy to shed the money-saving habits you clung to so tightly in undergrad, but don’t let all of those frugal tendencies disappear. I’m not saying you should be trolling Craigslist for random club meetings with free pizza, but keep in mind that sometimes, you were willing to exert just a little extra effort to save a little extra cash.

Lifestyle inflation is very real, my friends, and deceptively hard to identify. Hopefully a couple of examples from my mistakes will help you avoid some of your own — and if you’ve learned nothing else: dear Lord, please don’t shop at Whole Foods when there’s a Trader Joe’s right there.

Lex Erath is a recent economics graduate currently working in health care consulting. She enjoys writing, riding, and Celtics games.

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  • Savanna Swain

    This is so true. I think a lot of the reason why it’s so easy for us to justify over spending when we get more income is because we feel like we deserve it- like, hey, I’m done with school, I got this awesome job, I should spend a little more on fitness. But budgeting is lifelong; and doesn’t go away. It doesn’t mean we have to be destitute, but I just remember “hey, I got by as a student on this lower income just fine, I’m not gonna die if I don’t spend more on X just because I can.”
    100% with you on the Whole Foods comment too!! I can walk out of TJ’s and spend under $50 for a full load of groceries and spend that much at WF and walk out with three things!

    • Lex Erath

      So true- I end up in that “I deserve it” mindset way too often! And Whole Foods = Whole Paycheck, at least for me 🙁

    • elle

      TJ is less expensive, but in my experience their produce isn’t as good, and doesn’t last long. I don’t finish it. So at WF, I will eat every piece of fruit or lettuce I buy. That makes a difference to me, and I can shop once a week rather than more often. WF wins in produce. Their store brand cereals etc are less expensive or equal to Target’s.

      • Savanna Swain

        I agree about the produce point. I usually don’t get my produce from Whole foods or Trader Joe’s because I’m lucky enough to live somewhere where there are farmers markets from March through November- if I lived somewhere else I’d probably buy my greens from WF, but the rest of my stuff from TJ’s for sure (yogurts, cheese, canned goods/soups/quick foods)

        I also don’t like that I can’t buy just like, one zucchini at Trader Joe’s. I have to buy a pack, and that’s super annoying to me.

  • I can relate to this. For some people lifestyle inflation is about getting a new car or buying a new house to match their new income, but I’ve always done okay at living below my means. It gets trickier with things like food and health-related expenses. I’ve always been a picky eater and my skin reacts negatively to pesticide and hormone filled food so of course I upgraded to Whole Foods after grad school. With HEB now stocking more organic stuff and careful planning I’m down to about $400 a month in groceries for just myself. I’m not a huge fan of eating out so that’s a place I save and I bring lunch to work every single day but when I think about what $400 meant to me 5 years ago, I can’t believe I’m blowing that much on groceries now.

  • Anna Yugova

    ClassPass has been great for me to add a couple of pilates classes or other fancier workouts, or just to entertain me if I want to do something new. They have been raising their rates, too, but on the other hand, they have a lot of promos, referral payments, and they added more flexibility to their plans. This way I can go to pilates 5 times a month for a fee that is modest for these classes. There’s also Groupon, but it’s exhausting to monitor the deals.

  • Jack

    Yeah when it comes to health and fitness I always think I can justify it. I just started spending $168 CAD a month on unlimited Barre classes again, but I LOVE IT. It keeps me in shape, and then I don’t mindlessly shop on my lunchbreaks – I work out instead. Obviously financially it would be way smarter for me not to spend that money, but I start to go crazy when I make my ENTIRE life about finances.

  • Sara

    I only recently discovered this term and I think it is so pervasive. Things that I was okay with, once I get into the habit of a “luxury” I have a hard time reversing. For example, a year ago I was content without a dishwasher. Now that I have one in my apartment, I know I can’t live in an apartment without one (probably increasing the price of the apartments I can rent)! I currently am good about primarily shopping at the discount grocery store. Luckily, it’s the most conveniently located but I want to maintain these small habits that save me a ton of money in the long run.

    • Sara

      Also, I am so jealous of you Americans and Trader Joe’s. No such store in Canada 🙁

  • Whitney

    I teach at a popular barre studio (a national chain) and while my commitment is a bit larger, a lot of our front desk staff work just a shift a week and get to take as many classes as they want for free. Something to look into if you love a particular studio class, and have a few hours a week after/before work/on weekends.

    Also I know the “whole paycheck” thing is a popular snark, but unless there is a great farmer’s market in season, I have yet to find a grocery store that sells quality produce for less. Everywhere I’ve lived the Safeway/Shaws/etc has less quality produce at the same or higher prices, and while I may get a “deal” at TJs, it goes bad much quicker and seems to always be wrapped in unnecessary packaging. If I have the time, I hit up WF for my produce for the week and maybe some bulk dried beans/grains, and TJs for anything else.

    Spontaneous buys are what always bust my budget, so my biggest grocery store hack is simply meal planning ahead of my trip, so I only buy what I need to make those meals. It also means I waste less too.

    • Another easy grocery hack is to Eat Before! Sometimes, all it takes is hitting the sampling displays before you shop the rest of the store, sometimes something more substantial, but you can easily save $20 or more (sometimes *much* more) depending on the quantities you usually buy.

      Great article, Lex!