Close this search box.

Table of Contents

Lifestyle Creep


Lifestyle creep, also known as lifestyle inflation, is a phenomenon where an individual’s expenditures increase with their income. As people earn more, they tend to spend more, often on improved living standards, comfort, and luxury items. This may affect savings and investment goals if not well managed.


The phonetics of the keyword “Lifestyle Creep” can be written as: ˈlaifˌstail kri:p.

Key Takeaways

Sure, here you go:“`html

  1. Gradual Increase in Expenses: Lifestyle Creep, also known as Lifestyle Inflation, is a phenomenon where your expenses increase along with a rise in your income. It describes the situation where discretionary income rises proportionally to spending.
  2. Hinders Financial Progress: Despite higher income, Lifestyle Creep can hinder financial growth and impede goals like saving for retirement or paying off debt. It’s essential to be aware of this tendency and make deliberate choices about spending increases.
  3. Prevention through Budgeting: To prevent Lifestyle Creep, one can create a proper budget, limit luxury purchases, and be mindful of long-term financial goals. Automatically diverting increased income to savings or investments can help one stay disciplined.



Lifestyle Creep, also known as lifestyle inflation, is a crucial concept in personal finance and wealth management, signifying the gradual increase in one’s spending as their income rises. The increase in expenditure often goes towards non-essential items and services that improve the standard of living but are not necessarily needed. This term is important because it highlights how these subtle and often unnoticed changes in spending habits can hinder long-term savings and investment goals, potentially leading to financial struggle in the face of unforeseen circumstances or diminished income in retirement. By understanding Lifestyle Creep, individuals can take steps to control unnecessary expenses, and instead, focus on growing their wealth purposefully and sustainably.


Lifestyle Creep, also known as lifestyle inflation, is a phenomenon that refers to the idea of people increasing their standard of living as their disposable income rises. The purpose is not intentional but rather a consequence of experiencing greater financial freedom or resources. This often happens when people receive salary increases or come into extra money. They may start spending more on dining out at finer restaurants, updating their wardrobe more frequently, upgrading their car, or moving to a more expensive home, just because they can. The new spending habits become their new ‘norm’ and create a higher benchmark for future spending, thus inflating their lifestyle.However, lifestyle creep has significant implications for long-term money management and wealth building. While it can certainly make life more enjoyable in the short term, an increasing lifestyle cost can hamper the ability to save effectively for future financial goals, such as retirement or buying a home. It may result in reduced financial security and less financial flexibility in the future. Or in worst-case scenarios, it can even lead to debt if the increased spending isn’t supported by the increase in income. Thus, being aware of and managing lifestyle creep is crucial in sound personal finance management.


Lifestyle Creep, also known as Lifestyle Inflation, refers to the phenomenon where spending increases as income increases. Here are three real-world examples to illustrate this concept:1. A young professional, let’s call her Lisa, starts her career in an entry-level position earning $40,000 annually. She lives in a small apartment, drives a used car, and cooks her meals at home. After a few years, Lisa gets a promotion, with her annual income increasing to $60,000. However, instead of maintaining her earlier standard of living and saving or investing the extra income, Lisa moves to a more expensive apartment, buys a new car, and starts dining out regularly. This is lifestyle creep – Lisa’s expenses have inflated in line with her increased income.2. A software engineer, named Martin, has been working for five years and receives a significant salary increase due to his performance and market demand for his skills. Suddenly, he now feels that he can afford more luxury tech gadgets, high-end furniture, a larger mortgage, or more expensive vacations. He quickly adjusts his lifestyle to utilize his increased salary. Before he realizes it, he’s living paycheck to paycheck despite earning a high salary. This is a classic example of Lifestyle Creep.3. A business consultant called Emily, after years of hard work and dedication, opens her own business which turns out to be very successful and more profitable than her previous job. She quickly becomes accustomed to more luxury travel, increased shopping, expensive hobbies, and membership in an elite social club. Over time, Emily’s lifestyle starts requiring the new higher income to maintain, and saving or investing for the future becomes more difficult because she feels that she cannot downgrade her lifestyle. This, again, is lifestyle creep.

Frequently Asked Questions(FAQ)

What is Lifestyle Creep?

Lifestyle Creep, also known as Lifestyle Inflation, refers to the phenomenon where as income increases, so does spending on non-essential or discretionary expenses. This can include a more expensive home, car, vacations, enlarged shopping budgets, etc.

Can Lifestyle Creep be a problem?

Yes, it can be if unchecked. While improving lifestyle with increased income sounds natural, Lifestyle Creep can harm savings and retirement funds, resulting in financial instability in the long run.

How can I identify if Lifestyle Creep is affecting me?

Signs of lifestyle inflation might include consistently living paycheck-to-paycheck, inability to save for your retirement, or emergencies, despite a rising income, increased use of credit, or feeling compelled to keep up with the same high-expense lifestyle of friends or co-workers.

How can I prevent Lifestyle Creep?

There are several preventive measures one can take, ranging from budgeting carefully, tracking expenses, being aware of one’s financial goals, consciously saving and investing a portion of any income increase immediately.

Will Living frugally prevent Lifestyle Creep?

Frugal living can help manage expenses and can be a method to avoid Lifestyle Creep. However, it’s also crucial to focus on saving and investing wisely.

Can Lifestyle Creep ever be positive?

Lifestyle Creep isn’t always negative. If the additional spending enhances your quality of life without impeding your long-term financial goals, it can be seen as a positive aspect.

How can I recover if Lifestyle Creep has already affected me?

Recovery from Lifestyle Creep involves reassessing your budget, trimming unnecessary expenses, setting and sticking to financial goals, and emphasizing saving and investing. Consulting with a financial advisor can also be beneficial.

Related Finance Terms

Sources for More Information

About Our Editorial Process

At Due, we are dedicated to providing simple money and retirement advice that can make a big impact in your life. Our team closely follows market shifts and deeply understands how to build REAL wealth. All of our articles undergo thorough editing and review by financial experts, ensuring you get reliable and credible money advice.

We partner with leading publications, such as Nasdaq, The Globe and Mail, Entrepreneur, and more, to provide insights on retirement, current markets, and more.

We also host a financial glossary of over 7000 money/investing terms to help you learn more about how to take control of your finances.

View our editorial process

About Our Journalists

Our journalists are not just trusted, certified financial advisers. They are experienced and leading influencers in the financial realm, trusted by millions to provide advice about money. We handpick the best of the best, so you get advice from real experts. Our goal is to educate and inform, NOT to be a ‘stock-picker’ or ‘market-caller.’ 

Why listen to what we have to say?

While Due does not know how to predict the market in the short-term, our team of experts DOES know how you can make smart financial decisions to plan for retirement in the long-term.

View our expert review board

About Due

Due makes it easier to retire on your terms. We give you a realistic view on exactly where you’re at financially so when you retire you know how much money you’ll get each month. Get started today.

Due Fact-Checking Standards and Processes

To ensure we’re putting out the highest content standards, we sought out the help of certified financial experts and accredited individuals to verify our advice. We also rely on them for the most up to date information and data to make sure our in-depth research has the facts right, for today… Not yesterday. Our financial expert review board allows our readers to not only trust the information they are reading but to act on it as well. Most of our authors are CFP (Certified Financial Planners) or CRPC (Chartered Retirement Planning Counselor) certified and all have college degrees. Learn more about annuities, retirement advice and take the correct steps towards financial freedom and knowing exactly where you stand today. Learn everything about our top-notch financial expert reviews below… Learn More