I’ve read a lot about the dangers of lifestyle inflation on other blogs, and it makes sense: As I make more money, if I keep my spending the same, I’ll be increasing the amount I save without giving up our quality of life.
This logic may be hard to argue with, but I’ll try.
I think lifestyle inflation is natural, can be used as a reward, and we should all allow ourselves to let go every once in a while, even if it means forgoing some of our savings.
I recently received a raise at work. It wasn’t large, just about a 3% increase in my bi-weekly paycheck. It felt nice to be recognized for a job well done, but I suddenly had a decision to make: What should I do with my extra coin?
Around the same time, I signed up my first advertiser for the blog. Again, not much, but I’ll hopefully get more advertisers and I have to make a decision about what to do with my extra money.
First, I thought about just putting it in savings and over the course of a year, I’d have a couple thousand extra dollars the bank. Nice, right?
Then, I let my mind wander. I’ve wanted an iPhone for awhile, but that’s ridiculous, right? I don’t actually need one, do I? My phone works fine for phone calls and text messages, isn’t that enough? Of course, being connected all the time would be cool. But is it a realistic option?
For awhile, I’ve lived like a college kid. I live in an apartment where two of the occupants live in closets (we had to remove the shelves so they could fit their beds. All it is is a bed), I live in a room with no windows (not the closet, but I won’t be bragging anytime soon), and I eat pasta about 6 times a week. I don’t live a lavish life, but to be honest, I don’t mind it because I know I’m saving $300-$400 a month in rent alone.
Now is my time to slowly move away from living like a college kid. I should afford myself something nice every once in awhile. Now is once in awhile. And that something nice is an iPhone. I’ve worked hard the past 9 months and taking a look at my budget planner, it looks like I’ve been saving about 50% of my income each month. I’ve been up a healthy emergency fund, fully funded my 2009 Roth IRA, and now I deserve to be rewarded.
The iPhone cost $200 plus $30 a month for the service. That comes $920 for two years of service. Sounds like a lot, right? Well, between my raises and my blog income, it will account for a little more than half of my income increase. Sounds reasonable, right?
I know that I could simply increase my savings and that I don’t NEED an iPhone, but after weighing the costs and advantages of this, I’ve decided to go for it. I’m rewarding myself for a job well done, and I’m still able to save a significant amount of my paycheck.
Readers, how do you feel about lifestyle inflation? Am I right or am I being silly and simply justifying a ridiculous purchase?
Of course, I’m not one to throw money around without thinking about minimizing the cost, so I did my research and realized that the $200 iPhone could be mine for…free. Want to know how? Come back tomorrow and find out how I snagged a free iPhone and 2 free months of service.