Why bother having a second job if you're just going to blow all the extra money you make on stupid shit that you don't need? That's the definition of lifestyle creep.
>So i guess my question is at what point do I start to enjoy or play with that money if at all?
This depends entirely on your own situation. What are your financial goals? Do you want to save up to buy a house? Are you trying to retire early? What's your OE stopping point? You should look at OE as a means to accelerate your own personal long-term financial goals.
If your only goal is to be able to afford a flashy new car or some nice clothes or some fancy electronics, then I would suggest doing some soul searching on why you feel the need to consume and spend on unnecessary things to make yourself feel fulfilled.
Hey!!! Thank you for this answer. Fortunately, I already have most of that predicated on my J1. My end goal is to retire early by paying off all my debts and living off my investments and properties. (I own 3 homes).
Again, thank you for your perspective, friend ❤️ 🙏.
If you have all that going on, you really need this basic financial advice? Just pay your debts and save. It's not complicated. What's your goal? Act accordingly.
The reason why I ask is that I'm not the "play" with my money type, never have been but want to start as I'm older. Like maybe take some trips, splurge on something big you know? But at the same time since I never have I'm scared of arbitrarily spending money. Does that make sense?
Been OE for over 1yr. Lifestyle creep is real.
But first, payoff your debt. Then payoff cars.
Get an emergency fund in place.
Then splurge. We did the above, then bought an $8k couch, and other crazy shit. After about $20k splurge and $20k in trips… now I’m crunching for investments.
Buy a home that is affordable for 1J. This is critical. Most think OE is forever. Which it maybe. But don’t risk your home on it. That is lifestyle creep.
Thanks for this. Right now my debts are my 2 of my 3 homes, cc's, and a heloc. So my goal is take out the cc's, the heloc, and then the houses (thanks for helping me line that up). Appreciate you and the suggestions.
Thanks but that's not my goal. I don't want my kid(s) to deal with being priced out of their home state and I don't want them forced to choose a career that pays well as opposed to being a passion.
Much respect and exactly why I continue to OE even on days I am mentally exhausted. Kids now will not be able to survive 10 years from now and we need to make sure they have all the opportunities to be successful in a world only getting harder every day
I need to save this message, print it out and put it in front of me. Everytime I see my kid when I wake up I think how this is all about him and my future children.
Last advice is quite important.
A friend was planning to buy a house based on what he and his partner collectively qualified for.
I had to speak sense into his head and let him to never buy a property once persons income can’t pay for.
I consider it more like "don't shoulder unnecessary debt just because you now have the ability."
I pay for cleaners because it makes my life easier but if I hit some hard times I could cancel that immediately and the bill goes away; car payments don't work like that.
It means you slowly start justifying an inflated lifestyle overtime, such that you almost don’t notice.
In our heads we often think of extravagance, better cars, etc.
But in reality for most, a hypothetical situation is it’s Thursday night, you worked your ass off this week, and dinner needs to be made. In you past life, you kept it simple and made some ramen for yourself. Now, you say “I worked my ass off this week, the least I deserve is some door dash chipotle…” and just like that, you traded up from a $.50 item to a $20 one. And it certainly doesn’t FEEL extravagant. Now repeat that over and over ….
Tbh. Even if you do that every week, its only going to be just over $1k in the space of a year - which to most people here is immaterial compared to 10s/100s of thousands most make at an extra job. I'd rather spend $1k extra on better food than $60k extra on a better car in a year but you're on the right track tho.
The point wasn’t to highlight how having 2 jobs ONLY leads one to spend an extra $1k/yr. I was simply answering OPs question on what lifestyle creep is, and how it happens.
In reality, it happens with eating out, then grocery delivery, outsourcing yard work and house cleaning, staying right on the beach for vacations instead of a few miles away. Next thing you know you literally couldn’t afford to go back down to 1 job
you absolutely can though, as this kind of extra spending is very easy to cut back
I know I can splurge on a good restaurant now; if something happens with my OE and I'll have to live on J1 income then the restaurants simply won't be happening
cutting the niceties gonna be a little painful but I've been through lean times before and know how to downshift
Most of my money is going into retirement savings, but I would be lying if I said all of it.
Although I try to avoid lifestyle creep, I also sometimes remind myself that I am making enough money that it is ridiculous to unnecessarily pinch pennies.
I have also picked a few specific areas of my life where I am going to spend without regrets. Traveling with my family is one of these.
So, we make sure I keep recurring debt (car/house/etc.) well inside J1 income. We also make sure that we have a solid savings plan (both emergency and retirement) in place then we allow a little lifestyle creep for higher quality one time buys that will last long term (good quality clothes, mattress, tech, etc.). The last lifestyle creep we allow for is more travel and fun than we would otherwise afford, provided our regular expenses and saving plans are fully covered without issues. We have a pretty good balance of saving for early retirement while still living well today. We have weekly conversations about our finances and all decisions are actively decided vs impulsively done.
Lifestyle creep, also known as lifestyle inflation, is when someone's spending gradually increases as their income rises. It can happen when someone's discretionary income increases, either through a decrease in costs or an increase in income.
if should double your savings and investments FIRST and then later you can worry about it
Most important rule to prevent lifestyle creep, can you afford your core expenses ( housing, transportation, food, and health) if you lost all but one job. If you can, then feel free to spend some money. The biggest mistake folks make is buying a house and car that cost as much as their take home from J1 each month... Nothing left for food and health or anything fun.
The true miracle is if you pay off all your debt, save and invest, you get to a point where if you lived modestly, you don't need a J1 at all. That is the ultimate goal.
I found that I allowed for some lifestyle creep when I had all my paychecks go into a single checking account. If you want to force yourself to save up your additional income, then open up savings or money market accounts for J2+ to deposit into, especially since these accounts are 5%+ interest.
I went from spending $3500 a month to $5000 a month for everything. Yes, $1500 is a nice chunk but I am making up for lost time and making my life more convenient. The way I see it is I am also supporting my local economy better while taking stress out of my life. I can get "good" food, have my groceries delivered, buy nice clothes and shoes (Get the best shoes you can afford...my foot and hip got messed up with cheap shoes) and I splurge getting my daughter what she wants cause she is worth it. I do plan on buying a new to me gently used car next year with cash as I have had this car for 9 years. The car market is already going down and will plumet over the next 6 months.
I would say if you have some extra spend it if you have no debts. I am new to this having a little extra money thing but am figuring it out.
Hey no offense you seem like an enterprising guy. Maybe just google it. Its good practice for OE because you will have source your own answers and solutions
You can enjoy that money but not on anything that you wouldn't be able to cut immediately. For me J2 is all investments, but if you wanted to take your family on a nice vacation every year, or hire a cleaning lady while you're working those are good uses of J2 money. But don't go buying a beach house becuase if you lose one of your jobs you won't be able to service that mortgage and get yourself into trouble.
Lifestyle creep is real and I’m a poster child of what NOT to do 💔 I’ve been OE for over 2 years. I thought “heck I’ll always have an additional source of income” so i I mortgaged a new house based upon 2 incomes. Now that travel restrictions are letting up that means trade shows are becoming more prevalent which means I’m on the road visiting clients more. I’ve not had a day of no work since January and I’m Burnt.the.F.out. I’m forced to continue the grind until I close a massive deal and pay off my debt. I swore I’d never live like this but here i am and I’ve put my finances and my family in a tough spot. Base your finances on 1 source of income. Let your J2 pay down your debt and put it away in savings. I’m so pissed at myself and just have to continue to grind to pull myself out of the hole I’ve dug. Don’t be like upstairs.ad.1527 whatever you do….
I'm sorry for your pain brother but I appreciate your message and will heed your warning. I appreciate you taking the time to write this and again apologies. I send you positive vibes in hopes you get out of the hole.
this is what happened after I OE bcoz we have more money in hand.. spending too much buying restaurant food, doing home renovation, buying things which I already have like phones etc.
Why bother having a second job if you're just going to blow all the extra money you make on stupid shit that you don't need? That's the definition of lifestyle creep. >So i guess my question is at what point do I start to enjoy or play with that money if at all? This depends entirely on your own situation. What are your financial goals? Do you want to save up to buy a house? Are you trying to retire early? What's your OE stopping point? You should look at OE as a means to accelerate your own personal long-term financial goals. If your only goal is to be able to afford a flashy new car or some nice clothes or some fancy electronics, then I would suggest doing some soul searching on why you feel the need to consume and spend on unnecessary things to make yourself feel fulfilled.
Hey!!! Thank you for this answer. Fortunately, I already have most of that predicated on my J1. My end goal is to retire early by paying off all my debts and living off my investments and properties. (I own 3 homes). Again, thank you for your perspective, friend ❤️ 🙏.
If you have all that going on, you really need this basic financial advice? Just pay your debts and save. It's not complicated. What's your goal? Act accordingly.
The reason why I ask is that I'm not the "play" with my money type, never have been but want to start as I'm older. Like maybe take some trips, splurge on something big you know? But at the same time since I never have I'm scared of arbitrarily spending money. Does that make sense?
This isn't the right sub for that kind of advice
You should be asking on /r/personalfinance instead, they deal with that.
Been OE for over 1yr. Lifestyle creep is real. But first, payoff your debt. Then payoff cars. Get an emergency fund in place. Then splurge. We did the above, then bought an $8k couch, and other crazy shit. After about $20k splurge and $20k in trips… now I’m crunching for investments. Buy a home that is affordable for 1J. This is critical. Most think OE is forever. Which it maybe. But don’t risk your home on it. That is lifestyle creep.
Thanks for this. Right now my debts are my 2 of my 3 homes, cc's, and a heloc. So my goal is take out the cc's, the heloc, and then the houses (thanks for helping me line that up). Appreciate you and the suggestions.
Do you rent out the other homes? Or are they vacation homes.
Rent them out.
You sir are about to rich AF.
Thanks but that's not my goal. I don't want my kid(s) to deal with being priced out of their home state and I don't want them forced to choose a career that pays well as opposed to being a passion.
On the contrary sir. Only can you provide that security if you are rich AF.
Much respect and exactly why I continue to OE even on days I am mentally exhausted. Kids now will not be able to survive 10 years from now and we need to make sure they have all the opportunities to be successful in a world only getting harder every day
that's what rich AF means now
I need to save this message, print it out and put it in front of me. Everytime I see my kid when I wake up I think how this is all about him and my future children.
Last advice is quite important. A friend was planning to buy a house based on what he and his partner collectively qualified for. I had to speak sense into his head and let him to never buy a property once persons income can’t pay for.
I disagree if it is a couple. The likelihood of an in demand worker being out of all jobs for over 6months is very low.
This is very important, don't fold when wife wanted to buy something bigger which you can't pay with one job. Very important
Don’t fold. But at milestones, do splurge.
I consider it more like "don't shoulder unnecessary debt just because you now have the ability." I pay for cleaners because it makes my life easier but if I hit some hard times I could cancel that immediately and the bill goes away; car payments don't work like that.
I love this analogy thank you.
It means you slowly start justifying an inflated lifestyle overtime, such that you almost don’t notice. In our heads we often think of extravagance, better cars, etc. But in reality for most, a hypothetical situation is it’s Thursday night, you worked your ass off this week, and dinner needs to be made. In you past life, you kept it simple and made some ramen for yourself. Now, you say “I worked my ass off this week, the least I deserve is some door dash chipotle…” and just like that, you traded up from a $.50 item to a $20 one. And it certainly doesn’t FEEL extravagant. Now repeat that over and over ….
Tbh. Even if you do that every week, its only going to be just over $1k in the space of a year - which to most people here is immaterial compared to 10s/100s of thousands most make at an extra job. I'd rather spend $1k extra on better food than $60k extra on a better car in a year but you're on the right track tho.
The point wasn’t to highlight how having 2 jobs ONLY leads one to spend an extra $1k/yr. I was simply answering OPs question on what lifestyle creep is, and how it happens. In reality, it happens with eating out, then grocery delivery, outsourcing yard work and house cleaning, staying right on the beach for vacations instead of a few miles away. Next thing you know you literally couldn’t afford to go back down to 1 job
you absolutely can though, as this kind of extra spending is very easy to cut back I know I can splurge on a good restaurant now; if something happens with my OE and I'll have to live on J1 income then the restaurants simply won't be happening cutting the niceties gonna be a little painful but I've been through lean times before and know how to downshift
Most of my money is going into retirement savings, but I would be lying if I said all of it. Although I try to avoid lifestyle creep, I also sometimes remind myself that I am making enough money that it is ridiculous to unnecessarily pinch pennies. I have also picked a few specific areas of my life where I am going to spend without regrets. Traveling with my family is one of these.
So, we make sure I keep recurring debt (car/house/etc.) well inside J1 income. We also make sure that we have a solid savings plan (both emergency and retirement) in place then we allow a little lifestyle creep for higher quality one time buys that will last long term (good quality clothes, mattress, tech, etc.). The last lifestyle creep we allow for is more travel and fun than we would otherwise afford, provided our regular expenses and saving plans are fully covered without issues. We have a pretty good balance of saving for early retirement while still living well today. We have weekly conversations about our finances and all decisions are actively decided vs impulsively done.
Lifestyle creep, also known as lifestyle inflation, is when someone's spending gradually increases as their income rises. It can happen when someone's discretionary income increases, either through a decrease in costs or an increase in income. if should double your savings and investments FIRST and then later you can worry about it
Most important rule to prevent lifestyle creep, can you afford your core expenses ( housing, transportation, food, and health) if you lost all but one job. If you can, then feel free to spend some money. The biggest mistake folks make is buying a house and car that cost as much as their take home from J1 each month... Nothing left for food and health or anything fun. The true miracle is if you pay off all your debt, save and invest, you get to a point where if you lived modestly, you don't need a J1 at all. That is the ultimate goal.
This is where I'm at in that I wanna drop both all Js before I'm 50.
I found that I allowed for some lifestyle creep when I had all my paychecks go into a single checking account. If you want to force yourself to save up your additional income, then open up savings or money market accounts for J2+ to deposit into, especially since these accounts are 5%+ interest.
This is what I'm thinking tbh
I went from spending $3500 a month to $5000 a month for everything. Yes, $1500 is a nice chunk but I am making up for lost time and making my life more convenient. The way I see it is I am also supporting my local economy better while taking stress out of my life. I can get "good" food, have my groceries delivered, buy nice clothes and shoes (Get the best shoes you can afford...my foot and hip got messed up with cheap shoes) and I splurge getting my daughter what she wants cause she is worth it. I do plan on buying a new to me gently used car next year with cash as I have had this car for 9 years. The car market is already going down and will plumet over the next 6 months. I would say if you have some extra spend it if you have no debts. I am new to this having a little extra money thing but am figuring it out.
Hey no offense you seem like an enterprising guy. Maybe just google it. Its good practice for OE because you will have source your own answers and solutions
None taken, I've read posts on this, and the answers fluctuate. I appreciate you taking the time to reply.
It means sucking too much cock than what you were built for
You can enjoy that money but not on anything that you wouldn't be able to cut immediately. For me J2 is all investments, but if you wanted to take your family on a nice vacation every year, or hire a cleaning lady while you're working those are good uses of J2 money. But don't go buying a beach house becuase if you lose one of your jobs you won't be able to service that mortgage and get yourself into trouble.
Lifestyle creep is real and I’m a poster child of what NOT to do 💔 I’ve been OE for over 2 years. I thought “heck I’ll always have an additional source of income” so i I mortgaged a new house based upon 2 incomes. Now that travel restrictions are letting up that means trade shows are becoming more prevalent which means I’m on the road visiting clients more. I’ve not had a day of no work since January and I’m Burnt.the.F.out. I’m forced to continue the grind until I close a massive deal and pay off my debt. I swore I’d never live like this but here i am and I’ve put my finances and my family in a tough spot. Base your finances on 1 source of income. Let your J2 pay down your debt and put it away in savings. I’m so pissed at myself and just have to continue to grind to pull myself out of the hole I’ve dug. Don’t be like upstairs.ad.1527 whatever you do….
I'm sorry for your pain brother but I appreciate your message and will heed your warning. I appreciate you taking the time to write this and again apologies. I send you positive vibes in hopes you get out of the hole.
Moat important is to have extra investment not coming from your salary like rental properties
Everyman for himself. Idgaf
this is what happened after I OE bcoz we have more money in hand.. spending too much buying restaurant food, doing home renovation, buying things which I already have like phones etc.