Lifestyle Inflation Part 2: Key Drivers

Lifestyle Inflation Part 2, Key Drivers _ AnythingYouWantBlog.com

After looking at how my spending has changed over the past four years, I found that I had succumbed to the dreaded lifestyle inflation monster. I learned that two categories were especially troublesome for me: food/drink and “other,” a mashup category that I use to track all of my irregular spending. Today, I’ll look deeper into those two categories to see what is really driving the lifestyle inflation and if there is anything I can do to curb it.

Food spending – groceries and restaurants

Within my food category, I track spending on both groceries and restaurants. The graph below shows how those two categories have tracked from FY 2012 – 2015 (aka July 2011 – June 2015).

Ali's Food Spending Over Time, Lifestyle Inflation Illustrated _ AnythingYouWantBlog.com

As you can see, grocery spending has been pretty consistent over the past three years. During FY 2012, I was living in an apartment and spent most weekends at my parents’ house. When I was at home, my parents paid for food. When I was at my apartment, I didn’t do much cooking, and my basic meals were yogurt and frozen pizza. Not very healthy, but apparently very cheap. And probably not an accurate starting point.

Looking at FY 2013 – 2014, you can see more consistent grocery spending.  The weekly amount that this grocery spending works out to seems reasonable to me, and I’m happy with this number. There was a small spike in FY 2015, which I think is due to BF moving in with me. We share groceries 50/50, and I’ve been buying more proteins and cooking more elaborate meals since BF moved in. I’d like to try to even out this spike a bit this year and get back to FY 2013 – 2014 spending levels.

The real problem here is restaurant spending. It has increased by almost 130% since FY 2012. That is bad news. Again, the FY 2012 number is a bit depressed due to my spending so much time with my parents, who paid when we ate out, but still. Even looking at the change from FY 2013 to 2015, there was a 70% increase.

Restaurant spending needs to come down this year. Now that BF and I have been living together for a while and have a more established routine, I think this will be possible. I would like to get spending in line with the FY 2013 – 2014 numbers.

Other spending – key drivers

As I mentioned in my post about how I budget, I lump all non-regular spending into a single “other” category to give me some flexibility in terms of where I spend my money each month. This category has unfortunately increased by 64% over the last four years, and the graph below illustrates what the change has looked like.

Ali's Other Spending Over Time, Lifestyle Inflation Illustrated _ AnythingYouWantBlog.com

As you can see, most categories are staying relatively consistent. A few, like gas, have already been reigned in. There are also a few, such as school and home repair supplies, that will naturally decrease this year (I graduated so will no longer incur school expenses, and moving/redecorating expenses from when BF moved in are all paid).

Of course, there are also a few problem categories. Weirdly, my cash spending has gone up quite a lot. I have no idea why this is, but I don’t like it. I mentioned in my budget post that I don’t track cash spending because it typically constitutes a very small part of my budget. I am going to try to bring this back to FY 2013 – 2014 levels and if I can’t, I’ll have to start tracking cash spending.

Clothing is also a big growth area. This doesn’t surprise me; I know I’ve indulged in clothing a bit more than I should have over the past few years. With a 75% increase, it is time to cut back. I have more than enough clothing already in my closet. At the very least, I would like to cut this back to FY 2012 levels, if not shoot for something more extreme. I’ve been contemplating a 30-day shopping ban, so perhaps that is just the re-set I need.

I have started going to the gym in the last two years, so there is a substantial increase in that category. I still spend a relatively modest amount on my gym membership, and the large percentage increase is primarily due to the fact that I spent almost nothing on exercise before. My health is worth it to me, so despite this category increasing I think the spending is here to stay. I would like to look for somewhere else to cut back, as a tradeoff to this increase.

My gift spending has also increased substantially (166%! Oof!). I think this is due to two key factors: 1) I’ve become more generous with my money as I feel like I have more, and am therefore buying more expensive gifts, and 2) I’ve added a big gift recipient – BF. My gifting list is pretty short, so adding just one person (albeit a person who I buy pretty substantial gifts for) has made a big impact. While I love my family and friends dearly and plan to continue to give them gifts, perhaps I should adjust my spending in this category and find ways to show more love with less money. I’d like to get this category back to FY 2013 levels if possible.

Finally, we have the biggest culprit in terms of dollar value – travel. During FY 2012, I spent no money on travel. I suspect that this was because I travelled only with my parents, who footed the bill. In FY 2013, 2014 and 2015, I’ve spent a pretty penny on travel. But unlike my other spending categories that have increased, I don’t really plan to change my travel spending too drastically. Travel is one of my top priorities, and spending money on travel brings me great joy. While I’ll try to cut back a bit this year, I expect that this category will hold relatively steady.

Have you looked at what is driving your lifestyle inflation? Are you going to make any changes to curb lifestyle inflation?


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19 thoughts on “Lifestyle Inflation Part 2: Key Drivers

  1. The best part in my opinion is your analysis. Increased spending doesn’t always have to been seen as a problem. When you work hard, it’s okay to spend in ways that make you happy. If going out to eat is something you truly enjoy, then there’s no issue eating out some more. It’s the mindless spending that’s the real problem.

    That’s what I love about your analysis. You’re aware of your spending and can then make decisions on what is or is not “good” spending for you as it compares to your budget.
    Great stuff! cheers!

  2. I think your food expense chart will look bell curvey like ours after a while. After graduating, our dining and takeout expenses went up and up until it reached an “oh shit” tipping point in 2013 with $2,203 dining out and $1,624 takeout. We brought it down last year, and will bring it down further this year so they are both under $1,000 for the year.

    Beware of shopping bans, especially clothes shopping bans. Some clothing just has to be replaced. And temporary shopping bans can easily turn into shopping “delays” where it just gets adds up and gets spent later.

    We are bringing gifts expense down by making a lot of stuff for people. For our extended families at Christmas, we make a different thing each year. Canned apple butter, bottles of vanilla, candles, pickles. And with friends continuing to get married, Marge makes the new couples embroidery. It looks expensive but the materials are very cheap. It’s just time intensive.

    • I think you’re right that my food spending will be something of a bell curve. My goal is to get it to a sustainable level where I feel like I am eating well and indulging occasionally without breaking the bank.

      I love the idea of making things to gift to people. I do a lot of this already – giving friends and co-workers homemade candy and beer for the holidays. For me, it is my family and BF that I struggle with the most.

  3. I love that you are tracking each area of spending. I do the same thing and eating out is usually my biggest category that fluctuates month to month. But by keeping an eye on it, I know if we ate out extra one month, we really should try to cut back even more the next.

    • That’s great that you keep track of your spending! I’m the same way, and I try to even things out over time if I feel I’ve over spent in one area or another.

  4. Can I just say that your charts are beautiful? It’s so easy to talk about the content of the post and skip right over the aesthetic aspect, but well done on that! 🙂 I also find it super impressive that you have been tracking an analyzing your spending over such a long period and can see these trends. That will serve you well in the long run, as you certainly already know.

    I think some lifestyle inflation is okay if you, for example, felt super deprived of restaurant meals before, and now relish every morsel when you go out to eat. But we can definitely relate to the mindless restaurant spending, just because we were too tired or lazy to shop or cook. Reining that in definitely helped get our spending into acceptable boundaries!

    • Thank you! I have a lot of fun making the charts and graphics for the blog so I’m glad you like them!

      I agree that some types of lifestyle inflation are fine, its just the mindless/convenience/not values-based stuff that needs to go!

  5. When assessing lifestyle inflation, I try to think of things in just two categories to start:

    Core (Childcare, Household goods/Groceries, Car, Basic home maintenance, Giving, Taxes) and Discretionary (Everything not in the previous bucket)

    If our Core bucket goes up, it’s because we’ve made some decisions to increase it. If our discretionary bucket goes up a lot, we have to review our spending and decide if that is how we want to proceed. Our core spending is a little less flexible, so we don’t usually look to make cuts there.

    • Those categories make a lot of sense. I also don’t spend much time reviewing my fixed expenses because they’re sort of “set it and forget it.”

  6. I think ultimately what drives lifestyle inflation is your lifestyle philosophy. A lot of “frugal” people talk or write about how to find discounted luxuries to inflate your lifestyle. Instead we have decided to continually find ways to deflate our lifestyle so that we’re only spending on what we truly value (which also happens to include travel).

    • Good point – getting a “good deal” on lots of luxuries probably still means that you’re spending a lot of money. I think that by looking at my spending this way I was able to see more clearly what spending does align with what I value, and acknowledge where I can cut back.

  7. I’m not sure if I’ve seen you write a post about how you and your boyfriend share expenses since he moved into a condo you own, but I would be curious to read about that! My boyfriend moved in back in December, so that’s something we’ve been thinking about a lot over the last year or so.

    I break my restaurant spending down into multiple categories: 1) social with friends (counts in my entertainment budget), 2) work lunches, and 3) eating out by myself. (My boyfriend pays for eating out together as part of our expenses sharing arrangement.) My grocery bill spiked when we started cooking together, buying more spices and such, but it evened after a few months back out to be basically what we were spending before.

    I try to set goals for how many times to eat out. I know for me, the cost of eating out increased post-college not because of frequency but because I was going to nicer places! We still eat out about 1-4 times per month, but we usually go to a nice place 🙂 I’m more okay with spending restaurant money at nice places eating food we can’t cook at home.

    I found that everything in general is more expensive in my big city than it was in my college town. Yoga classes? $20 a pop instead of $20 per academic period lol. I also spend wayyyyy more on travel because my travel used to just be visiting my family. Now it’s on international vacations. I also buy nicer presents for my friends and family, donate more to charities, and have friends getting married which didn’t happen in college. Same thing with clothes – I have the same amount of clothes approximately as I always did, but I buy more expensive items.

    My employer pays for my transit pass, which is an amazing benefit!

    • I’ve written a bit about how my BF and I share expenses in my budget post and a post about our joint credit card, but I’ll try to put something together that goes into more detail.

      I like that you break your food expenses into so many categories. I try to avoid eating out on my own since it is kind of mindless for me, but maybe separating it out of my other restaurant spending would be helpful.

      • I like having the eating out by myself category separated exactly because it is mindless. I usually give myself a $20/month budget for that so that I feel like I can grab something quick occasionally when it makes something easier.

  8. This was a fun post to read and lucky for me my hubby happened to look over my shoulder and got excited when he saw a graph and then even more excited when he read 30 day ban on shopping… So I guess I should say thank you? Or maybe not 😉

    • Haha well I hope you and hubby are on the same page then! I think a joint 30-day shopping ban could be a lot of fun and you’d get tons of motivation from each other.

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