Retiring early generally means living frugally to maximize savings and investment capital. Some people are lucky enough to already have a fortune and can live a lavish lifestyle even as a retiree.
Unless you are in the latter camp, you have to be smart with your money to make it to early retirement. For many, this isn’t a problem. For others, it gets to be too restrictive and that’s when the problems start.
Lifestyle creep is when you gradually start spending more money on things that feel good like buying a new car that has more creature comforts than your older car that you’ve paid off years ago.
This can set your early retirement plans behind or derail them completely if you aren’t careful. In this article, I will go over several ways to prevent this from happening.
Develop a side hustle
Lifestyle creep usually happens when you start making more money with your job through a raise or promotion. You feel like you can spend more money and still sock away enough money to fulfill your early retirement dreams. What can happen is that the spending can outpace what you were saving before.
Some people end up in a hole that ends up putting them in a financial jam that requires some creative measures to get out of it. Think Save Retire has a resource about loans you can try.
Though the best idea is to cut back on your spending, if you really enjoy having the finer things, you’ll need to find a way to take in more money. In other words, find a side hustle you can do to make more to finance your lifestyle.
A side hustle can be as simple as a second job, or as elaborate as an actual business. It depends on how much money you need to support your lifestyle without sacrificing your dreams of early retirement.
Try something fun that’s budget friendly
You may be overspending on your lifestyle because you’re bored. Bored spending is very common and sometimes not even noticeable. Finding a new hobby or just something to pass time might be just the ticket you need to get rid of the excess junk you are buying.
For instance, maybe you need some adrenaline, in which case taking up a sport like canyoning or white water rafting can give you a boost. If you are spending too much time in an urban environment, maybe you just need some nature. Hiking is inexpensive, kills a lot of time which could have been spent shopping and spending and is also a great way to clear your mind.
Treat yourself
You may have gone too far in one direction that you are now overcompensating for. If you were sacrificing too much with your frugality, then just try to find a way to treat yourself to something once in a while to resist the urge to go too deep in your lifestyle spending.
There’s nothing wrong with buying some stuff for yourself even if you really don’t need it. The problems start when you have to overspend to maintain a lifestyle.