“Ramping up doesn’t have to be your goal. And we’re not talking just about the number of employees you have either. It’s also true for expenses, rent, IT infrastructure, furniture, etc. These things don’t just happen to you. You decide whether or not to take them on. And if you do take them on, you’ll be taking on new headaches, too. Lock in lots of expenses and you force yourself into building a complex businesss—one that’s a lot more difficult and stressful to run.”
http://www.fourhourworkweek.com/blog/2010/03/08/why-grow-and-other-wisdom-from-37signals/

Really like the term: “lifestyle inflation”. Too often people can let themselves feel entitled with each new raise or job. Letting their expenses run out of control on the assumption of always making that or more, they’re face with a hard reality when the music stops.

People see living as a student as a bad thing, yet they think back to their student days as among the happiest in their lives! Somewhat ironic. I see it as making more time for people and experiences than the dreaded *stuff*, and being too cheap to even consider battling “The Jones’s”.

@Lucie -I’m thrilled that you’ve found my writings helpful. Everyone needs to work this out for themselves but I’m glad I prompted you to think about your finances a little more. Thank you for commenting -it’s really encouraging.

@Jon -any blog comment that references Maslow’s Hierarchy of Needs is a winner in my book! You’re right that everyone has different circumstances and we have to find the right balance. My aim here is to get people thinking about things: you’re right about the risk of being victims of circumstance. I do however believe strongly that everyone has more power than they think: if they are willing to stop seeing saving as ‘depriving’ themselves, but rather working to provide their future self with a gift, they can make powerful progress.

@the Other Adam -Thanks for sharing your experiences. I’m sorry to hear about your time at university but am encouraged that you made it a learning opportunity.
As for the hierarchy of needs, the important thing is understanding what spending really is basic and what is more for ‘belonging’ and ‘esteem’: it’s not a ‘one size fits all’

@2 cents -Your article is an interesting read so thanks for bringing it up. To save everyone from googling the article the link is here:

http://balancejunkie.com/2010/01/14/your-financial-hierarchy-of-needs/

It helped me prioritise my life goals (short-term and long-term), and it will give you an idea of where you are in achieving those goals.

Apologies for the short comment, but I thought it was worth bringing up.

During my third year of uni I took a gap year to work at PwC. This meant while most of my friends were barely getting by at uni, I was living at home and for the first time in my life had money coming in on a regular basis. This went to my head, and once a few debts had been paid, I was was ‘living it up’. Gym membership, increased travelling, new phone, excessive amounts of DVDs and CDs and going out every weekend. It was great!

Then, my year out ended and I went back to uni, having saved nothing. I suddenely found that I was used to a certain lifestyle and had no ability to fund it. So I had to cut down a lot of expense, and it wasn’t easy. And I didn’t manage to cut it all out, and ended up in a bit of debt. Thankfully it was money loaned from my parents, so I paid no interest and was under no pressure to pay it back, but not everyone is that lucky.

I left uni a year and a half ago, and I’ve been working pretty much since then. That experience helped me to prioritise when I needed to spend, and when I needed to save. I have been able to treat myself regularly enough to be enjoying myself, but I have also managed to put away enough money to get a mortgage for a house. I don’t always get it right, for instance over christmas with trying to save and going out I was down to about £4 in my account.

I think the think I’m taking away most from this blog and the other comments is that if you do start to have more money than you are used to, prioritise and decide when you need to spend and when you need to save. It’s much easier to see a bit of excess in your account and treat yourself than it is to cut back when you’re used to a certain way of living!

On the one hand, I think most of us can admit to gratuitous spending to placate our material needs. I worry that I am guilty of many of the situations you mention above (gym, phone) and would be equally guilty of the car had lady luck not dealt me a good hand on that front.

The point your blogs make about keeping these in-check, and recognising the undue extravagence, is helpful, although I suspect I’ll just be happy to save anything left over (admittedly, diminishing as lifestyle inflation takes over!).

However, I’m starting to question the realty of whether we can *all* escape being victims of circumstance in the same way. I’d hate to think that by saving impressively now, I was somehow delaying inevitable choices that I would need to drive myself forward. It isn’t always so easy for people to think of the long game when you see young and successful twentysomethings carrying around exactly the same material assets/gym memberships, willing to tackle their financial situation later. In all likelihood, their personal finances are probably cack or they have acquired some alternative windfall. However, that is largely by-the-by. We as individuals feel the need to act in our own way. It may be to shun such expense, find alternatives (relatively rapid home-ownership as opposed to expensive apartment rent, say (both of which carry risks in themselve)), or somewhat follow the crowd.

Progressing as an individual sees fit is key. For many, that is lifestyle inflation, but provided it is based on *relative* financial security, it has to been seen as ‘necessary’ in a sense. As in, it can have self-esteem benefits, or the advantage of paying for more qualifications by staying in education longer, that help you move forward (c.f Maslow’s Hierarchy of Needs). Pursuing most options is almost certainly more expensive than ever, but not the same for everyone. In a lot of ways, this loosely relates to a more implicit case of ‘Opportunity Cost’.

While saving should, I feel, be a key element of lifestyle, I don’t feel it should come at the expense of immediate goals or desires. And some are more expensive than others. What we could all do better, I’m sure (certainly for myself), is take a second look and realise how we should prioritise (and if necessary, pay) for these, and which may simply be the commercialised chaff.

Have things got a bit out of control? Yes. Has the recession really curbed desires? Hardly. But I still hold that removing yourself isn’t necessarily that easy.