Posted by Tim Stobbs on November 25, 2008
Lifestyle inflation is the bane of existence for poor souls who are trying to get their act together and live below their means. It is the tendency to increase your spending faster or equal to the increases in your paycheque. I know I suffer it at times, mostly related to fixing up the house. You see I’m a home reno addict. I can’t stop fixing up my fixer upper house.
Granted some of the repairs are required like a leaky tap or putting in some new flooring in a closet because the old floor is basically not attached to the subfloor anymore. Yet other projects are completely for selfish reasons. For example, new oak hardwood in the living room wasn’t required, but it looks very nice.
My greatest problem with these projects is they come in waves. We will go for months without doing anything and then I’ll tackle four projects at once. It’s murder on the cash flow when it happens. So to help control this little spending weakness of mine, I’m going to create a new savings fund for home renos and put some cash to it each month. I know that doing it makes this a rather permanent fixture in my budget, but on the other hand I will start to control the spending amount a bit better. This way I will only start a project if I know I have the cash to complete it in the savings account. I’ll be starting this up in May 2009 when the daycare opens again in the house (my wife is currently on maternity leave).
So how do you handle your spending weakness? What have you found that works for you?
This post is now part of the 109th Carnival of Personal Finance.