The trap of lifestyle inflation - and how to stop it ruining your finances

You've just had a pay rise or a bonus and the prospect of saving more each month or starting that investment account is on the horizon. Until you tap a notification to join the high-end gym around the corner that you've always fancied trying out. Or you get an email and sign up for a new meal subscription that looks delicious and might just save you a bit of time in the week.

Before you realise it, the boost to your bank account has disappeared and your spending has gone up in line with your income. This is lifestyle creep in action, and it might well be holding you back financially.

Lifestyle creep, otherwise known as lifestyle inflation, is a steady increase in expenses that happens as income goes up over time. The gradual upgrade from the basics range items to the branded items in your weekly shop. An extra dinner out each month after you receive a salary boost. Put simply, lifestyle inflation is the concept that when you earn more, you spend more.

Don't get me wrong - you work long and hard for your money and I'm a big believer that you weren’t put on this planet to simply save as much as possible. You should absolutely enjoy the fruits of your labour.

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But lifestyle creep often happens unintentionally, and the trouble with these slow and steady spending rises? They can set back your progress financially towards building the life you want to create. So if you're falling into the trap of lifestyle creep, here is a quick guide to keep your spending under control when you get a pay rise.

Get intentional

Are you spending your money on things that add value to your life? Or do you spend money mindlessly and forget where it’s gone? Becoming more intentional with your spending isn't a case of stopping spending altogether.

The aim is to help yourself spend money on things that matter most to you and spend less on things that don't add to your life. Ask yourself what areas of your spending matter to you and enhance your life - and where you spend with little reward.

Review your expenses

This is where the planning comes in. Budgeting isn’t sexy, but having a plan for your money and knowing what needs to go where - as well as how much you have to work with - gives you a sense of control and confidence in your financial decisions. Think about your priorities: how often do you want to go out for coffee each month? How much do you typically spend on a trip to the pub?

Get an idea of how much you will spend and factor this into your monthly budget. A clear plan for your money isn’t going to ruin your social life; instead, it’ll help you to have fun without the spending stress.

Open up about money

As a nation, it's fair to say that we’re not very good at talking about money. So much so that a huge 81% of people still avoid talking about money, even though the positive impact of being open about money has been proven. Negative emotions - from shame to embarrassment - often lie at the heart of the reluctance to discuss money.

But as Dr Brene Brown said, shame thrives in secrecy and the best antidote is to face it head on. So don't be afraid to say to your friends that you’re going home after two drinks, or that you don't want to spend £50 on dinner because it doesn't align with your spending plan.

Keep an eye on the end goal

Remind yourself what your big picture life goals are. Often when our goals slip out of focus, it can be easy to become distracted and start to drift further away from them, which can leave you frustrated down the line.

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Create a vision board or stick some post-it notes around your home to remind you of what you're working towards, whether that’s paying off debt, saving for something or building for the future. Check in with yourself regularly to track your progress and you’ll stay motivated.

Ellie Austin-Williams is the author of Money Talks, a Lifestyle Guide for financial wellbeing. Find her on Instagram at @thisgirltalksmoney.