Ever wonder why you feel like you haven’t truly “made it” even after reaching significant financial milestones? Why things still feel just out of reach? It all comes down to context.
Understanding Context
Think of your financial life as a picture within a frame. The frame determines what you see and perceive as possible at any moment. Everything depends on context. Anything beyond the frame’s borders doesn’t matter – it doesn’t apply to you.
Now, imagine that you can resize and reposition that frame to see more. The new bits, parts you couldn’t see before, cause the whole picture to change slightly. Similarly, as your financial situation evolves, the frame expands and shifts, revealing new possibilities and opportunities and changing your perspective.
For example, as your income grows, certain goals that once seemed unattainable, like owning a dream home or funding a luxurious vacation, may now appear achievable. Likewise, other things, once standard in your lifestyle, fall out of the frame.
The more your income increases, the more you can stretch the frame – but the rate at which most people can stretch the frame is limited. That’s why you often have to let some things go on the other side of the frame. Some things that previously claimed your resources need to go.
Lifestyle Creep: Curse or Opportunity?
When applied to finances, this phenomenon is often referred to as lifestyle creep. Lifestyle creep is when increasing income leads to higher spending. While conventional wisdom warns against it, lifestyle creep isn’t inherently bad. Instead, it can represent financial growth and evolving priorities—if managed properly. Think back to early in your financial journey. Would having substantial savings at the time mean you would have taken a risk on a different, more exciting job opportunity? Would you have bought a car or that apartment instead of using rideshares and renting?
Consider these shifts:
- From Surviving to Thriving
Early in your career, savings might have meant basic security. Today, savings could mean peace of mind, flexibility to pursue a career pivot, or the ability to help a loved one in need. - Financial Freedom vs. Keeping Up
Your neighbor’s new car or your colleague’s luxury vacation can trigger a sense of comparison. But are those things aligned with your values and financial goals? Financial freedom is about making intentional choices. - From Anxiety to Opportunity
Remember when paying bills was a primary stressor? Now, your worries may center on how to manage wealth effectively for future generations. This shift reflects financial growth and maturity.
Don’t Feel Like You’ve Made It?
I’ve heard people say they feel like they are just not getting ahead, even though they’re making more money. It’s easy to lose sight of factors in your financial life when they aren’t top of mind every day. Think about how much is going into your retirement accounts, investment accounts, and Events & Opportunities Fund – this has now become standard operating procedure. While you may not like spending in some necessary areas, the fact that you can makes a huge difference in your quality of life.
Imagine a doctor telling you that a particular treatment could really help your daughter’s quality of life, but it isn’t considered medically necessary and won’t be covered by insurance. The fact that you can still consider pursuing the treatment and paying out of pocket puts you on a different level than countless people in this country. I wouldn’t call that lifestyle creep; I would call it financial freedom.
On the other hand, when seeing a neighbor with a brand new car or hearing about a co-worker’s incredible luxury vacation, you’ll need to consider – whether you want to spend your money on a new car. Or that luxury vacation? Really – do you? Or do you just want to feel like you can do those things?
Avoiding the Comparison Trap
As Theodore Roosevelt famously said, “Comparison is the thief of joy.” Instead of focusing on what others are doing, prioritize what truly matters to you. Whether it’s taking a dream vacation, buying a car, or funding a child’s education, plan intentionally to align these desires with your financial goals.
Keep in mind that many of you can do those things. When we sit down and talk about where you want your money to go, though, it often turns out that these are not the things most important to you.
It’s also important to mention that we typically have no idea how they bought the car or vacation or how long they might be paying for them. They have to reconcile those purchases with their values and financial situation – and their values and financial situation are likely different from yours.
Key Takeaways
- Your Financial Context Evolves
Growth changes your perspective. Recognize and celebrate how far you’ve come. - Lifestyle Creep Isn’t All Bad
Used wisely, it reflects financial freedom and the ability to embrace new opportunities. - Intentionality is Key
Align spending with your values, not societal pressures or comparisons.
You can call it lifestyle creep, or you can call it taking advantage of new opportunities. By shifting your context and embracing intentional financial planning, you can feel more confident in your progress and prepared for your next adventure—without sacrificing long-term goals.
At Infinity Financial Strategies, we help individuals and families make the most of their financial resources while planning for the next adventure and future generations. Let’s start a conversation about how we can help you align your wealth with your life’s biggest goals.