Years ago I came up with a “Freedom 35” goal. Basically, I calculated what my monthly nut was (all of my expenses) and would consider myself “free” if I had reliable automatic recurring income that met or exceeded that number. Not including work I had to go actually do (like gigs).
1 month before my 36th birthday, I crossed that line. That was a great day.
However, at the time I lived in an apartment. My monthly nut was very modest.
As my income grew, so did my lifestyle. I went from not owning a car to owning a car, I went from living in an apartment to renting a house, to owning a house.
My kids were young, and now they are older, and all relevant expenses attached to them grew.
Now, when I look back at my Freedom 35 number, I literally could not live on that number today. I would lose everything I have, even though that number then was liberating for me at that time.
I’ve learned that there is a term called “Lifestyle Creep” and basically everyone as their income increases learns to live off that as a new standard, and going back is basically impossible, or would be very painful. Before you know it, you’re at a very high number and a lot of stress and anxiety over the “what ifs”.
At some point, I pondered that my life right now is pretty good, and maybe I should resist this continued creep. I need to be grateful for this life I have, that is well beyond my Freedom 35 goal.
So what did I do about it? This is how I stopped it:
- I wrote a list of things I’m grateful for, and celebrate that. Instead of always wanting “more”.
- We decided we love our home. We love our neighborhood. We refuse to look at moving onto a bigger home. We will stay here for the duration. That alone will stop the creep, because a bigger house with everything that comes along with it probably moves the creep meter the furthest.
- I will save for all big purchases and not finance with debt, otherwise stated as buying things with tomorrow’s money. We wanted to do a big backyard renovation and pool, so we saved the entire amount and paid for it flat out. I didn’t want to have the debt service hanging over me. Same goes for my arcade and other fun things, they get saved for and paid for. All of that could stop in an instant without pain.
- I make minor inflationary adjustments to my annual budgets.
- We drive a modest car that we paid cash for, no payments.
- Large things like vacations are saved for.
- I will indulge myself, but avoid things that carry ongoing expenses. Car payments, vacation properties, boats with insurance and overhead, etc, are all things I avoid.
- As I write this, I can see a recurring theme is avoiding debt, and saving for the things I want. This allows me to buy these things without guilt or stress, and all of it can be dropped if necessary. Avoiding a monthly debt service avoids a huge amount of creep.
- By drawing a line in the lifestyle creep, it has allowed us to be very generous with our charitable giving. This makes me feel good.
- Now that I’ve reached this place, I intend to put a disproportionate amount of my future money and time towards worthy causes I want to support, instead of continuing the creep. I feel like this will give us a very fulfilled life instead of continuing to chase.
To close this thought, the takeaway for me has been how liberating it has been to realize Lifestyle Creep is a thing, decide what my ultimate lifestyle should be, then draw the line there. Further indulgences are saved for. After hitting that milestone my goals shifted towards helping others, and relieved me from a lot of stress about maintaining my lifestyle.
