Lifestyle inflation - is it a problem of control?
Since I started working as an attending my expenses increased compared to the expenses during my residency.
Things that have changed since the new job:
1. I drive a more expensive car. The reason to buy a more expensive one was: I need a reliable car because I am expected to be at work as scheduled. Calling in because of a broken unreliable car is not professional. This expense makes sense and is justified. My old car was not reliable at all and when I traded it in for the new one a light smoke was coming out from under the hood. They still took it.
2. I buy more business/official looking cloths and shoes. This is also justified. I don't wear scrubs or a white coat and as a laboratory director I have to look accordingly to project competency and authority to both sides, personnel and administration. Old or non-professional looking cloths won't cut it.
3. I go on more expensive vacations. That is just for fun and I know that I am not overspending. I decided that spending $10,000 per year on vacation is fine.
Things that didn't change:
1. We still live in the same house we bought during residency. At the time of the house buying I read that most people buy a smaller "starter" house first and later move to a larger one. We decided not to do that and bought a right sized house from the start.
2. We go out to eat about as frequent as during residency. The expenses didn't change much but the feeling has changed. Now I don't look at the prizes when I order. So the costs may have gone up a bit, but not significantly.
3. Nothing else changed really. Mostly we spend money on the same things as before, just the feeling is different, it just goes with ease and without any guilt feelings.
Some would say that I have a good self-control or will power. I would disagree. My will power is weak. But I have a trick.
I have worked out a decision process to use when spending money on something and that process became a habit.
Once you make a habit out of something, the will power is not necessary anymore.
How does this process work?
1. I have my major savings goal in mind and I update the status on how close I am to my goal once a month.
My major goal is to reach my savings magic number. I update the balance monthly and I know where I stand. I know how fast or slow my progress is. I also know approximately how long I still need until I reach my goal. That gives me an idea on how strict I have to be with spending money.
2. I ask myself only one question before spending money on something.
Questions NOT to ask:
Do I need it? - is a wrong question. Your brain will always fool you into the need. The function of your brain is to keep you safe and to prepare you for any possible adverse situation.
Do I like it? - is also a wrong question to ask. I noticed that I like a lot of things.
Do I want to have it? - the same, most of the times you would want to have it.
The question to ask is this:
How sad will it make me if I will die before doing that?
Here how the connection between savings goal and this one question plays its role:
I know that I am not there yet and I still need a few years to complete the savings goal. I know that the job safety is not guaranteed and the way to the goal might get longer. But I also know that I will not live forever, that at some point I will die. That might happen before I reach my savings goal.
All this information is balanced in the background. It is processed partially subconsciously and at the end I have my simple answer.
The degree of sadness will tell you everything: if you should do it immediately or if you should wait and if wait then for how long.
I always dreamed about a romantic morning at the Ritz hotel somewhere in Europe with strawberries and Champagne for breakfast.
After asking myself, how sad will it make me to know that I will die before I will get a chance to have my Champagne with strawberries for breakfast at a fancy hotel, the answer came immediately.
It would make me very sad. I didn't even want to wait for the hotel. Next day I went and bought fresh strawberries and Moscato vine (which I like more than Champagne). I had my special breakfast every Saturday and Sunday for 2 months in a row.
Sometimes I think of going on vacation to Ireland. I spent 6 moth in Ireland and I like this country very much. When I ask myself how sad it would make me if I die before I go to Ireland, it makes me just a little bit sad, like 10 out of 100. So it is not an urgent item and I don't spend much time thinking about it at this time.
Another example:
My friend went to China. When I ask myself how sad will it make me if I don't get to go to China before I die, the answer is surpizing: it will make me said if I do go there before I die. I don't know why. With a feeling like that I don't plan to go there.
Using this method makes the question about the lifestyle inflation mute and replaces it with a true personal value of things tailored exclusively for you.
But you have to be honest and only listen to you own feelings. It might not work for those who try to keep up with the Joneses. They have to work on their self worth and psychological self-sufficiency first.
