In short, lifestyle creep or lifestyle inflation is the gradual increase in expenses as income rises. As people earn more money, they may start to upgrade their lifestyle—buying more expensive items, dining out more frequently, or taking more luxurious vacations. This subtle rise in spending can eat away at savings and prevent people from achieving long-term financial goals. Essentially, lifestyle creep means that as income grows, so does the tendency to spend more, potentially leading to financial strain if not managed carefully.
As with most buzz words, there’s some nuance to this phenomenon that might get brushed over. Lifestyle creep isn’t necessarily a good or bad thing. Many would argue that if you have the money, why not spend it on what you want? We’re not here to give our opinion on what to do with people’s personal funds. However, if you catch yourself with a sudden change in income or with debts that won’t stop piling up, bankruptcy may be able to help you.
A drastic change in income is a predominant reason people consider filing bankruptcy. When someone grows accustomed to one income, the debts they incur rise to match that income. However, when income drops unexpectedly, the debts, unfortunately, don’t follow. A $400 monthly minimum payment that used to be affordable, now seems insurmountable. Once you start to fall behind on one payment, fees and interest often spiral from there creating a bigger and bigger issue.
If this situation sounds familiar to you, or you just have general concerns about being able to keep up with your debts, come schedule a free consultation with Minnesota’s friendliest bankruptcy attorneys. We’re here to answer your burning questions with understanding and compassion. Visit us at lifebacklaw.com to schedule.