How We Try To Fight Lifestyle Inflation

How we try to fight lifestyle inflation

We all know the two golden ingredients to speed up your journey towards financial independence.

I’m talking about (in prioritized order):

  1. Save more money
  2. Earn more money

My wife and I have improved both in the last five years.

Our savings rate is higher than it was five years ago.

We also earn more money than five years ago. I’m talking at least double as much.

However, we seem to have a problem. Even though we earn more money now, our savings rate (even though it has increased) has not followed the same trend.

What is the problem? You guess it. Lifestyle inflation.

For those of you who haven’t heard about the concept before: Lifestyle inflation means spending more money as you earn more money. You inflate your lifestyle with all sorts of things you previously didn’t need, couldn’t afford or both. For example, you buy a bigger house, you buy a (bigger) car or you start eating at more fancy restaurants.

How have we inflated our lifestyle?

There’s a couple of areas where we recently have inflated our lifestyle significantly.

Every month my wife makes an overview of our spending. We always find something that surprises us. I believe making an expense overview would be beneficial for everyone.

Recently, our three biggest lifestyle inflations have been:


A couple of years ago we bought a new apartment. Even with a child, it’s still way too big for us.

I have mixed feelings about the apartment. Even though moving from our old apartment to the new is a clear example of lifestyle inflation, our real estate has been the driving force behind our net worth for a while. The larger apartment only adds to that trend to a higher degree than previously. So, it’s perhaps lifestyle inflation for a great purpose (if the real estate prices keep rising in the long run that is).


Since we can now afford it, we have decided to upgrade our apartment refurbishing several rooms. However, that means we haven’t been able to invest last month and this coming month. Could we have lived in the “old” apartment? Yes, of course.

Hopefully, we will get some of the renovation investments back when we sell the apartment, but I’m sure we won’t get all of it back.

Renovations are on my mind at the moment, since it’s


We have lived perfectly well without a car for a long while. However, after getting a daughter we are seriously considering buying or leasing one.

Until now, we have borrowed a car or rented one when we needed it.

Right now, we are testing out a car on a short-term lease. It’s not cheap having a car and a clear example of lifestyle inflation.


Getting a baby has had a positive impact on our hearts, but a negative impact on our wallets.

The amount of stuff a baby accumulates is insane. We have bought stuff we didn’t need. However, a lot of things we have bought have made our lives easier (like three different cradles for different purposes). Still, it is lifestyle inflation since we probably didn’t need them to survive and the impact on our overall happiness is probably minor.


In 2019 we have had an increasing tendency to buy things when we wanted or needed it.

This can be a slippery slope and you quickly lose the overview of your spending.

Every month, my wife and I have looked horrified at the amounts we have been spending.

Is it lifestyle inflation? It is. I can tell you for certain we didn’t spend as much money when we were students five years ago.

What are we then doing to contain and fight lifestyle inflation?

I must say I have had some issues watching money flowing out of our accounts and not into investments. Looking at the monthly overview of expenses, my wife and I have agreed on some things we will

Making up for missed investments

We have decided to lower our spending for the coming months and make up for the missed investments.

This means we will pay ourselves first and invest a larger amount of money at the beginning of the month. This way we’ll make sure to compensate for the renovations in particular.

Who knows? We might continue afterward at this increased rate.

Reviewing our expenses every month

As a relatively new thing, my wife and I sit down together each month and go through our expenses. We always look at the biggest expense categories and make decisions on what to do differently the coming month.

It’s generating insights and actions I hadn’t dreamt about.

Buying second-hand and selling used items

My wife is a second-hand ninja and she has become very good at buying quality stuff at good prices.

What’s even better is that she somehow manages to sell the items at the same price or higher after using them for a while.

Not only is it better for the environment, she always manages to keep a steady flow of income and expenses for our stuff.

This makes things like clothes a surprisingly small expense category each month.

Testing before buying

We have started testing things before deciding to buy them.

For example, we are currently trying out whether having a car will substantially improve our lives.

Another example could be baby gear we borrow from friends to see whether we (and our baby) like them enough to buy them ourselves.

Isn’t it dangerous to try things and get used to having them? Yes, but we also like saving money. This means we are quite critical reviewers of whether owning the item is worth it or not. If we don’t use the car often enough to justify the amount spent each month, we will not buy one. Also, if there are cheaper, equally good alternatives such as biking, public transportation, borrowing a car or taking a taxi once in a while, we will opt for those.

One thing is for certain. We have allowed our lifestyle to inflate since graduating five years ago and now we need to become better at containing and potentially reducing the inflation – you’ll see in our monthly updates how it goes πŸ™‚

Your turn: How do you keep lifestyle inflation down?



Nick @ TotalBalance September 27, 2019 - 09:29

Yeah, babies are probably the worst lifestyle inflation of them all – they will keep getting more and more expensive over time πŸ˜› (much like your house).

For people like us (who live a somewhat inflated lifestyle already), there’s really not a whole lot that we can do to stop it altogether, but we can try to keep it at a minimum. – Unless you’re willing to move to MΓΈn and live in a tinyhouse? πŸ˜‰

I’ve noticed something interesting though in my own “purchase habits”. I’ll try to go for as long as possible, without buying anything (new). I can buy an occasional used item and the odd pair of new shoes every now and then (they wear down you know), but it’s what happens when those big ticket items suddenly pops up that’s interesting! If we start a (small) project at home, and I need a few items (like tools or screws or something), it escalates really quickly, because suddenly I’ve “opened” my wallet, and OOOPS, I just bought a new angle grinder (cause I kind of needed it…), some new clothes (I probably didnt need that), some toys for the kid and a trip to egypt (or something similar). It’s like that dopamine just takes over and screams: “HERE’S OUR CHANCE BOYS, HE’S WEAK! LET’S GET HIM!”

SO, I’ve concluded that planning (bigger) purchases, and spreading them out over a couple of months, is better than to NOT buy anything for long periods of time. Perhaps it’s silly, but it kinda works for me. I KNOW I need new shoes eventually, and I KNOW the kid needs new clothes (they grow when you keep feeding them!).

Now back to you! Ooooooh, a leased car?…I’ll be anxiously awaiting the buy vs. lease post then πŸ˜‰
As you know, I’ve leased for quite some time, and I’m now down to spending about DKK 35.000/year on my car (down from DKK 50.000), but there’s no doubt in my mind that the cheapest way to have a car, is to buy a lightly used one (3 years-ish), and keep it for 10+ years (or until the mechanical bills starts to pile up). The longer you keep it the better. – But let’s be honest and real here; nobody wants to drive a 10-year old car (unless it’s really nice, still!). So I’ve come to terms with the fact that owning/leasing a car is going to cost you a shit-ton of money, no matter how you do it. We own my wifes car (and lease mine), and it’s my goal to try and get our owned car down to about DKK 25.000/year. This will require us to keep it until it’s 10-12 years old (It’s a Skoda Rapid).

Since you live in the city, have you tried one of those car-sharing services, like Gomore or DriveNow?
What car are you looking at (small/medium/large)? You seem like a Renault Captur/Clio kind of car-driver? πŸ˜›

Carl Jensen September 27, 2019 - 20:20

Do babies really get more expensive over time? How is that even possible? :p

I guess it makes sense to try to wear out things and to save up for big-ticket items over time. In fact, I actually set money aside each month for big-ticket items I know are coming (e.g. vacations!).

I’ll keep it as a strict goal to minimize our expenses in the coming months. I feel like I’m losing to lifestyle inflation, and I don’t like losing πŸ˜‰

I’ll for sure publish a buy vs. lease post in the future πŸ˜‰ I agree with you. You can really do a lot of math on different solutions, but in the end, it’s going to be expensive no matter what. We do use Gomore and DriveNow often – that has been part of our plan not to have a car of our own, but unfortunately, they are not always there when you need them.

We are looking for the cheapest stationcar we can find, and you are actually right πŸ˜‰ we are looking at either a Renault Clio or Skoda Fabia at the moment. They are roughly the same driver.

Nick @ October 10, 2019 - 17:14

HA! I nailed it πŸ˜›

We had a Renault Clio IV (the non version) and my wife was quite happy with it. Personally, I find the seats a little bit too soft. The “sensible” choice would obviously be the Skoda, but it is a rather boring car to look at (also kind of bland interior) πŸ˜› . I believe it’s a better build car though that will depreciate less over time, compared to the Renault (have you seen how many of them is out there?!). One thing I would mention about the two though, is that the Skoda has extremely “short” seats, so you might not be comfortable in it during longer trips. I doubt it will be a problem for the missus though πŸ˜‰ Also you should make sure that they both have AEB (Automatic Emergency Braking), because I’m not sure the first Clios had it – and when you have kids in the car, I consider safety to be of the utmost importance πŸ˜‰

If you’re looking at leasing, and don’t mind a slightly used car (I assume you dont), I can recommend Alm. Brand Re-leasing. They have 0kr in “down payment” on the Renaults, and you can save something like 2-300kr/month on the lease, compared to new ones.
Have a look here: (they have a few models to pick from). The Re-leasing deals have the same service-plan as if it was a new car.

Carl Jensen October 12, 2019 - 13:38

Thanks a lot for the great tips, Nick! I’m quite keen on a Skoda – they have the VW feel but at a lower price. I agree safety is a high priority – that’s also why I lean towards leasing, so I can get the latest security features every couple of years πŸ™‚

Very interesting about the re-leasing. I had never heard about that concept before, but I definitely don’t mind a slightly used car if it comes at those prices. I’ll let you know once I have made a choice πŸ˜‰ Thanks again!


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