Tuesday, February 7, 2012

Lifestyle inflation

I've been thinking a lot lately about the idea of "lifestyle inflation". This is the phenomenon which makes wealthy people feel like they're poor, or that they're "hardly getting by" on massive sums of money. It's also a part of that oft-repeated phrase, "keeping up with the Joneses", and it's what a lot of people are blaming the current private levels of debt on. (I'd blame that more on advertising, but whatever.) I admit it: I'm a victim of lifestyle inflation. They say that "everyone does it", and the trick (according to money advice columnists) is to try to resist the temptation. "Spend less than you earn" and "try to figure out the least amount that you can live on, and bank the rest" are frequently heard pieces of sage advice. And it is wise: if you want to make money, build wealth, save up for your dreams, etc., you need to spend less than you earn. And a helpful way to do that is to avoid lifestyle inflation. But I admit it: I've given in to lifestyle inflation. And it's not always as bad as it sounds.
When Shane and I lived in our cabin, we were scraping by on about $1400-1500 per month. Why that amount? Because that's how much we were earning (combined) from our student jobs (post-tax). Now, I would never want to go back to those days. Our "treat" dinner was what we dubbed "moosey-mac"--boxed macaroni and cheese with some browned, ground moose meat mixed in. If we needed fruits and veggies to go with it, those were usually either a carrot split between us or some canned orange slices. Because it was all cheap. I admit that the moosey-mac was delicious, but healthy those meals were not. I wouldn't take seconds if I was hungry because, well, we just couldn't really afford it. I distinctly remember eating some chicken soup that I was pretty sure had gone off (it smelled bad, though it tasted fine) because I was more willing to risk food poisoning than I was to see all of that food (and money) get thrown out. We kept the heat down to 60 when we were both home and awake, and 55 at night because we were terrified that we'd run out of heating oil and have to buy more--which we couldn't afford. (My half of the 250 gallons, if I remember correctly, was $600.) Most nights at home were spent huddled near the heater, Shane on his computer and me reading a book, with only one light on so that we could keep our electric bill low. It was dark and cold, and we spent a lot of time away from the cabin to the detriment of the dog (home by herself). Whenever there was free food we'd load up so that we could save that one meal's worth of money. Of course, this is not to say that we didn't have outside resources. I'd spent the summer working two jobs so that I could save a little bit of money. (A grand total of $2000 was all I had in savings to start the school year.) "Extra" things, like the heating oil and getting the dog groomed, had to come out of savings. We made every penny squeak and did without a lot of the time. Both of us were too proud to ask our parents for help, determined to make it on our own. I played it all down when I spoke to my family, or made a joke of it, but there really were some times when we were both wondering if there'd be some unexpected bill we'd have to pay that would be impossible to cover, or if our savings would run out.
We never went to the doctor, or the dentist. We bought the cheapest of whatever we needed, and made do without most of the time. If nothing else, that time in our lives taught us serious thrift and resourcefulness. It was a big deal to purchase a 15 gallon water tank to hold excess water. We talked about this $25 purchase for three weeks before finally going ahead with it. Would the benefits outweigh the *enormous* cost?
So when I think now about our "lifestyle inflation", and the fact that I can't save practically any money now even though I'm making a fortune compared to what I was then, I have to remind myself that it's really not much of an inflation. We've moved up from being desperately poor to being somewhat comfortable in our current circumstances. I know that I could be spending less, but I would also be compromising my values to a great extent. I buy organic products not because it's the cheapest or easiest thing to do, but because I believe it's better for myself and the planet. I believe the same thing about the local meat we buy. It's far more expensive in some cases, but it tastes better and I feel good about it. I don't have to worry about how far away the meat came from, or how the animal was treated, or what crazy additives might be in it. And when I'm honest in my memories, I remind myself that I don't ever want to go back to the days when I was squirreling away free food for later. Would anyone? Those certainly were not halcyon days. And they weren't sustainable.
Shane *sort of* has a job. For now. He signed up for some classes so that he could take a student job working with/for a friend of ours. Unfortunately, he found out after going to the first day of one of his classes that he doesn't have the prerequisites for the class. By that point, it was too late to sign up for any other classes, and withdrawing from this class will drop him below the required number of credits to hold a student job. So he's waiting until the very last day to withdraw so that he can work as much as allowed between now and then. Even after the job ends, though, he'll still have his other two classes so at least he'll be getting out of the house. I think the worst part of unemployment is the lack of any structure to your day. There's no reason to go to bed, no reason to get up. It's more tiring than any other factor. And when you realize that your big accomplishment for the week is getting out of bed before noon, you know things have to change.
One of our goals for the future--when we're (hopefully) making more money--is not to let it go to our heads. We'll fight the good fight against lifestyle inflation and try to keep spending below our means. At the very least, it's our insurance against going back to a time when we really weren't sure if we could afford to feed ourselves.
Mr. Romney can say he "doesn't care about the poor", but I do. I know what it's like to be on that edge.


  1. Resisting the urge to compare oneself to the Jones' takes a very special gift. Not one that I have, unfortunately...

  2. It is hard. But a lot of times I see people spending money on crap, or on things which they never use. That makes it much easier to remember the things I'd really like to save up for and spend money on: travel, a house, gardening, starting a family, good food...