You have been killing it with your finances. You have optimized your savings rate, paid off debt and are now living within your means. Work has been going well and life couldn’t be better. Then you get rewarded with a promotion and salary bump! Look at all this extra cash now coming in! You can now take that vacation or upgrade your car. Your wardrobe looks pretty shabby and it would be nice to move downtown to be where all the action is. You deserve it. Right? Not so fast…. the pros and cons of lifestyle creep.


It’s only natural — you can afford it!

A nicer car, a bigger house, better clothes, fancy vacations, expensive restaurants. Those are all common ways your lifestyle can begin to creep back toward that average 5% savings rate.

Lifestyle creep has been called “the biggest threat to financial planning.”

But what’s so bad about rewarding yourself when you earn more?