Retirement Retirement Planning

6 Signs Lifestyle Creep Is Ruining Your Retirement (And 5 Ways To Fix It)

Keep your finances in order by identifying — and eliminating — lifestyle creep.

By Lucy Clark

Edited by Chris Kissell

Updated Jan. 22, 2025

Saving money isn't easy, especially when hidden costs sneak up on you. If your retirement savings account is looking a little thin, it might be more than just the impact of inflation. It could also be lifestyle creep.

Lifestyle creep happens when spending increases so much that savings start to dwindle fast. Culprits that increase lifestyle creep include subscription services, increasingly frequent shopping trips, fancier cars, and more.

Identifying how lifestyle creep is manifesting in your life is the first step in stopping it from ruining your savings. To get ahead financially, look for these signs of lifestyle creep.

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1. Your savings keep dwindling

Your savings account is the first place to look for signs of lifestyle creep. If the account balance is dropping fast, it might be a sign that you are letting fancy tastes get in the way of sound finances.

Look for ways to stop wasting money so you can put lifestyle creep behind you.

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2. Your spending is increasing

Your budget is another place to check for signs of lifestyle creep. You'll likely notice if major expenses such as your mortgage or rent increase. On the other hand, it may be harder to notice the smaller costs immediately.

Pay attention to seemingly innocuous repeat charges, such as rising monthly streaming service costs or a growing number of food-delivery fees.

3. You're ignoring your budget

A budget isn't meant to be treated as a suggestion. If you neglect your budget and overspend in non-essential categories — such as entertainment and travel — lifestyle creep is bound to set in.

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4. You can't stop buying the latest and greatest items

Trying to keep up with the Joneses is another way lifestyle creep can set in.

Even if you have the money to spend on the newest technology, shoes, or fashion and beauty trends, it doesn't mean you should do so.

5. You struggle to make ends meet each month

The most dangerous facet of lifestyle creep is that you usually don't notice it right away. By the time you do, you might be in trouble.

If you are having an increasingly tough time paying off bills at the end of the month, odds are good that you are incurring extra costs somewhere else.

6. You're falling deeper into debt

If you are experiencing lifestyle creep — and spending money on unnecessary expenditures — your debt is bound to grow.

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How to end lifestyle creep

If lifestyle creep is depleting funds, don't worry: Once you have identified the causes, you can work on solutions to start bulking up savings again. Here are some suggestions for addressing lifestyle creep.

1. Pay off debt

Unpaid debt can be a quiet but persistent drain on your personal finances, especially if that debt is attached to a sky-high interest rate.

Be it credit card debt, school loans, a car payment, or some other type of debt, make a continuous and dedicated effort to pay down debts to keep the interest rate from eating away at your savings.

2. Create a monthly spending plan

If you don't have a budget or you are not paying attention to your current one, sit down and reevaluate your monthly expenses and where your income is actually going.

Consider making a spending plan each month that will hold you accountable if you start to drift toward lifestyle creep.

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3. Establish financial goals

Many people view saving as an overwhelming and often unrewarding task. That's especially true when saving up for something large like retirement. After all, you won't be able to tap into that money for years or even decades.

To prevent becoming overwhelmed, identify a smaller, manageable goal. For example, save a small sum of money to pay down some of your credit card balance. Or, pledge to set aside money each month in a rainy-day fund.

4. Automate your finances

If you have difficulty controlling spending, take yourself out of the equation and automate what you can.

Talk to your employer or bank and designate a portion of your income to go straight into a dedicated retirement fund or savings account. This can help keep your impulses from wrecking your financial goals.

5. Change your saving habits

Sometimes, a simple change in your savings habits can pay large dividends that help you better manage your money.

If you try to save money at the end of each month but find your wallet is always empty, shift your approach. Instead, begin the month by saving. Then, use any leftover money at the end of the month for miscellaneous spending.

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Bottom line

As the name suggests, lifestyle creep is a slow-encroaching phenomenon. If you notice that your spending is out of balance, don't panic — sit back, evaluate your incoming and outgoing expenses, and make a plan to move forward.

There are many clever ways to pay off your debt. So, get rid of your obligations and change your spending habits to make debt a thing of the past.

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