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Expense creep is what I call it when we normalize my expenses due to an increase in income. In my last post I described a woman who spent $560,000 on two parking spaces. To us non-millionaires that sounds Crazy, but maybe it’s not.

The Glory Days

When I turned 4 I was given a $1 allowance every Friday. This would be the happiest day of the week for me. We would go to the store on Saturday so I would spend Friday night sleepless in bed trying to determine the most candy I could get for my money. Funny enough, that was the most important thing in my life at 4. I knew the butterfinger, and jolly rancher usually went on sale for 4 for a dollar. Note: Butterfingers are my favorite. The snickers would be 35 cents and the skittle would be 50. I would eat them all during the weekend (I definitely would have failed the marshmallow test).  

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The Ugly Teenager

As I got older the effect of the money started to wear off. When I went to high school, I got $4 dollars a week. This money seemed to be a drop in the bucket. I was making $7 an hour as a bag boy at the local grocery store and I was living large. I would go to the movies, buy pogs and bought my cell phone. It was a classic Nokia brick.

The College Years

Then I went to college and was broke. I would debate over whether I needed mayo on sandwiches, if I could live with the .99 cent bread, I only got the cheapest shampoo, and dollar store deodorant was what I used. I think I smelled good. 


Today

That brings us close enough to today. I feel like a frugal person in general, but when I think hard about my purchases I know that some things are name brand, I buy the bread that I think tastes the best, and I buy all the mayo I’d ever want. I find all types of ways to mentally rationalize some purchases, but what I worry most about are the purchases I don’t even think about any more.

The Judge

I point out people’s financial short coming all the time. I have a brother-in-law that just bought a house a few months after they became a two income home, and he talks about the endless projects he’s going to work/spend money on. I see people buying new cars when they probably could have gotten a few more years out of their old one. I see people buying name brand cereal at full price. Some days I want to do a Diembe Mutombo on these people. Then I take a step back and realize I’m not perfect


Scared Straight

When I make these occasional observations that I need to be examining my spending. I get the generic brand corn flakes, I get the dollar shampoo, I make meals out of canned foods that made their way to the back of the cabinets. I try to squeeze save every cent possible. This normally only last a week or so and then things gradually go back to normal.  Sometimes a couple of the new habits will stick and I try to have a sense of pride about some unusually cheap things that we do. Since I’ve been reading and writing more about personal finance lately, I have also gotten some really interesting and painless tips from various authors. In the back of my mind I do wonder what I have stopped worrying about. Maybe I’m buying a few too many butterfingers. 

Do you feel like you have stopped thinking about some of your purchases?

What do you do to bring them back into your consciousness?

 


Comments

Watching expenses is key to becoming wealthy. While we don't try to watch every penny, we have always made sure that any raises we get are saved instead of contributing to lifestyle creep. We have been frugal, but now that we are retired and have 'made it', sometimes we treat ourselves...

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06/21/2013 9:17am

I find that making sure extra money is put toward savings also helps me keep from expense creep.

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06/21/2013 8:28am

It is often easy for us to look at others and point out how they are doing things we think they shouldn't. There are just somethings I am going to buy name brand just because I feel more comfortable with those products like toilet tissues and certain foods. I buy a lot of generic items. Could I save more? Sure but I need to have a balance to that I don't have the expense creep. Saving things in expenses and labeling the bank account for everything purchased keeps things in check.

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06/21/2013 9:15am

Agreed, there's some give and take that needs to happen.

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My expenses have definitely crept up, but I'm not worried. For me, it's a natural progression; I am not longer a starving student and I make more money so I can afford to buy some things that I couldn't before.

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06/21/2013 10:03pm

My expenses definitely ratcheted up after I graduated college and bought a house. Got all the usual trappings of modern life and was paying a pretty penny for it. I've been trying to tone it down though and reprioritize my spending. BTW, Butterfingers rock and I also had a Nokia Brick!!! Best phone ever.

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06/22/2013 9:55am

I just moved last February and subscribed to Cox Cable for internet and TV. My latest bill went up by $15, this company is always increasing their fees. I almost have to laugh when I get a letter in the mail from them I know my bill is about go up!

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06/24/2013 12:02pm

The story was so fascinating. It shows the trajectory of our wants and desires. Over the years I've developed conscious spending habits, generic on most things and splurges on what I deem most important, travel and experiences.

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06/24/2013 12:50pm

This has been a topic of conversation for my wife and I lately. We're finally out of debt and feel like we can up a few of the categories in our budget in order to make life "better". I'm okay with expense creep as long as it stays under control. I think it's healthy to spend more as you make more, but it should not be a 1 to 1 ratio. For every dollar more you make, maybe you should only spend 50 cents of it and then up your savings/retirement by the other 50 cents.

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06/26/2013 7:43pm

We have certainly relaxed a little over the past few months but I think it is OK. We know how to keep an eye on things now. Today we went into the city to talk about sponsoring one of the excellent theatres we have here. Now it is giving back a little. So we did upgrade our mobile phones too!

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07/10/2013 2:47pm

Thanks for an interesting post, and your questions about expenses made me think. For the most part we're pretty frugal here at the urban homestead, but my weakness is going out to dinner. A restaurant meal can easily cost 5 times what it would cost to eat at home (and much more at our favorite sushi place!), so we try to only make it an occasional splurge.

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