Lifestyle creep can absorb the extra cash from a raise, planners say

The Story

Lifestyle creep is a slow, often unnoticed pattern of gradually spending more in daily life, and planners warn it can absorb the extra cash that comes with a raise. Brandon Wiebe, a fee-only financial planner with Money Helps in Saskatoon, said expenses tend to rise to meet the level of income someone has, explaining that “As soon as you’re making more money, the expenses will find their way, one way or another, to make sure all that money has a new job.”

Wiebe said spending can creep even without an income increase, such as adding a subscription to watch a new show or ordering delivery after a stressful day. He grouped the behaviour with impulse purchases and general poor financial habits.

Stacy Yanchuk-Oleksy, CEO of Money Mentors, a non-profit credit counselling organization in Alberta, said the issue is sometimes linked to small upgrades that create a chain reaction, using renovations as an example: “It’s like when folks do renos — they replace their stove and then they realize it doesn’t match with anything else. Then they renovate the kitchen, replacing everything,” she said.

The “hedonic treadmill” theory is used to describe the psychology behind lifestyle creep, including how one treat can become the new normal if the luxury is repeated, making it harder to quit because giving it up can feel like deprivation. Wiebe said prevention is easier than trying to undo spending later, adding, “It’s much easier to keep yourself from spending more, because you don’t know what you’re missing, so to speak.”

Wiebe said he focuses on stopping new expenses from building in the first place, and he described lifestyle creep as partly driven by what people feel they deserve. He said, “It is a very conscious effort you have to make to deprive yourself of something that you’ve grown accustomed to and enjoyed, and at that point, probably also think you deserve.”

When people notice their spending has gotten away from them, Yanchuk-Oleksy recommended writing expenses down as a way to hold themselves accountable, calling it “a terribly boring piece of advice” while also saying it works. She then pointed to getting help, noting that her organization offers free sessions and full budgets for clients.

Both planners also suggested practical routines to limit creep. Wiebe recommended scheduling regular time to review spending and a budget, such as monthly or every couple of months, then finding problem areas and swapping higher-cost items for cheaper alternatives. He also recommended automating savings so a portion of income is set aside without constant decision-making, saying it can create boundaries that help people avoid later course-correction. “One of the biggest things you can do on a long-term basis is to avoid the creep,” he said. “Instead of trying to pedal backwards and eliminate it.”