What are some examples of lifestyle creep? Forum

[Necho2]

I was always curious as to why this was, and this is what I currently believe. When I was in high school, a brand new Toyota Prius would run you between 35-40k. The difference in quality of life between driving that 35-40k car and driving a mid-tier Mercedes E-Class is huge. You actually get a ton more from that 15k (plus additional sales tax). As with anything, the returns diminish as you pay more. What is the difference between an E-Class and a S-Class? A Mercedes car salesman might try to tell you "a lot" and list features, but the reality is it's just a longer wheelbase as the car is more of a limousine meant primarily for corporate use transporting businessmen. You don't need that extra leg room to drive your 4 foot tall 5th grader to school. and the S-Class is like an additional 40-50k.

Sorry- I don't mean to jump on you, but this has never, ever been true. The newest Prius has a highest possible MSRP of like 33k for the 2023 model. And in 2008 (not sure how old you are, just ballparking), the fanciest model was like 23k. I think this is a solid example of the sort of justification that folks use to sell themselves on lifestyle creep though!

https://www.autoblog.com/buy/2008-Toyota-Prius/specs/

[Anonymous User]

I was always curious as to why this was, and this is what I currently believe. When I was in high school, a brand new Toyota Prius would run you between 35-40k. The difference in quality of life between driving that 35-40k car and driving a mid-tier Mercedes E-Class is huge. You actually get a ton more from that 15k (plus additional sales tax). As with anything, the returns diminish as you pay more. What is the difference between an E-Class and a S-Class? A Mercedes car salesman might try to tell you "a lot" and list features, but the reality is it's just a longer wheelbase as the car is more of a limousine meant primarily for corporate use transporting businessmen. You don't need that extra leg room to drive your 4 foot tall 5th grader to school. and the S-Class is like an additional 40-50k.

Sorry- I don't mean to jump on you, but this has never, ever been true. The newest Prius has a highest possible MSRP of like 33k for the 2023 model. And in 2008 (not sure how old you are, just ballparking), the fanciest model was like 23k. I think this is a solid example of the sort of justification that folks use to sell themselves on lifestyle creep though!

https://www.autoblog.com/buy/2008-Toyota-Prius/specs/

I'm the quoted anon. Admittedly my numbers were off, don't know where I got the idea that a prius would run 35-40k. But nevertheless, I think my point stands. Let's just use today's figures for example, a 33k prius purchased in a state with 7.75% sales tax runs you around 36K after fees and destination charges. An E-class at 56k MSRP runs you around 61k after taxs and fees. I think many people feel that the extra 25k is worth the difference in comfort, which is virtually why everyone at a certain level of income drives a Mercedes E-class or comparable car.

I think if you're reading this and unsure, just go test drive both cars. If you drive the Benz and think "why would anyone pay an extra 25k for this car, it's not much different from the prius", don't buy it!! But if you test drive it and think "wow this is a big difference and would really change how I feel about my commute to work", then it's up to you to decide whether you want to pay the extra 25k for it. I'd just like to push back a bit because "this is a great justification for lifestyle creep" can be said about any reason for any expense. I don't disagree that many people overspend, but I also think it's pretty much true that everyone could be living more frugally to some extent. And I do NOT believe that just because you could spend less in a situation means that you should. I've been stung so many times for trying to cut costs in places I shouldn't have, but of course hindsight is always 20/20.

[Anonymous User]

I was always curious as to why this was, and this is what I currently believe. When I was in high school, a brand new Toyota Prius would run you between 35-40k. The difference in quality of life between driving that 35-40k car and driving a mid-tier Mercedes E-Class is huge. You actually get a ton more from that 15k (plus additional sales tax). As with anything, the returns diminish as you pay more. What is the difference between an E-Class and a S-Class? A Mercedes car salesman might try to tell you "a lot" and list features, but the reality is it's just a longer wheelbase as the car is more of a limousine meant primarily for corporate use transporting businessmen. You don't need that extra leg room to drive your 4 foot tall 5th grader to school. and the S-Class is like an additional 40-50k.

Sorry- I don't mean to jump on you, but this has never, ever been true. The newest Prius has a highest possible MSRP of like 33k for the 2023 model. And in 2008 (not sure how old you are, just ballparking), the fanciest model was like 23k. I think this is a solid example of the sort of justification that folks use to sell themselves on lifestyle creep though!

https://www.autoblog.com/buy/2008-Toyota-Prius/specs/

I'm the quoted anon. Admittedly my numbers were off, don't know where I got the idea that a prius would run 35-40k. But nevertheless, I think my point stands. Let's just use today's figures for example, a 33k prius purchased in a state with 7.75% sales tax runs you around 36K after fees and destination charges. An E-class at 56k MSRP runs you around 61k after taxs and fees. I think many people feel that the extra 25k is worth the difference in comfort, which is virtually why everyone at a certain level of income drives a Mercedes E-class or comparable car.

I think if you're reading this and unsure, just go test drive both cars. If you drive the Benz and think "why would anyone pay an extra 25k for this car, it's not much different from the prius", don't buy it!! But if you test drive it and think "wow this is a big difference and would really change how I feel about my commute to work", then it's up to you to decide whether you want to pay the extra 25k for it. I'd just like to push back a bit because "this is a great justification for lifestyle creep" can be said about any reason for any expense. I don't disagree that many people overspend, but I also think it's pretty much true that everyone could be living more frugally to some extent. And I do NOT believe that just because you could spend less in a situation means that you should. I've been stung so many times for trying to cut costs in places I shouldn't have, but of course hindsight is always 20/20.

Biglaw income partner. I agree with all of this. You can also buy lightly-used luxury cars, which IMO is the way to go; you get the experience of driving a BMW or a Benz or whatever without losing 20% of the car’s value once you drive it off the lot.

[institutionalized]

The time = money equation will start to go the other way. Rather than using your time to make more money, you'll realize that money buys more time, since biglaw will occupy the rest of it. In other words, if you value your personal time, you'll pay money for more of it. Some good examples in this thread of housekeeping services, laundry services, etc.

[Anonymous User]

Biglaw income partner married to biglaw counsel. We make in the neighborhood of $1m a year. We're both in our mid-30s, don't have kids, and aren't planning on having them. Here are the things that eat a good chunk out of our paycheck:

1. Our house. We bought a house for around $2m in a HCOL (bordering on VHCOL) area and our mortgage+property tax is around $8000 a month. We have also been doing a lot of home improvement projects that have probably cost $100k-$150k over the last couple of years.

2. Food and drink. We don't buy a ton of new electronics, clothes, expensive cars, etc., but we both love food and wine. It is not terribly uncommon for us to spend $300+ to go to dinner, and it is exceedingly rare that we spend less than $100 on dinner out. If we get Doordash/Postmates, it is usually closer to $100 than $30, unless we are literally getting fast food or the like.

3. Services. We have a housekeeper who comes once a week (and babysits our pets if we are both gone for more than a day or so) and a gardener who comes once every other. We work out with a personal trainer a few times a week and a pilates instructor once a week. This stuff comes out to a couple thousand dollars a month, although we were able to save probably $600 or $700 a month by cancelling our Equinox memberships during the pandemic. We think it's worth it, but YMMV.

4. Travel/vacations. We try to take one good vacation and a couple of shorter trips each year. We probably spend $300-$500 per night on hotels when we travel, plus flights, food/drink, usually a cabana for one day if it's a warm weather vacation, etc.

5. Random expenses. We pay a stupid amount for our electrical bill, particularly in the summer when it gets hot and AC gets expensive. We live in a city where we need to drive, and car repairs/maintenance can get expensive. We have pets that need to go to the vet from time to time. We have complicated taxes (being a partner does this) so we pay $2000 a year for a good accountant. We have a bunch of different streaming services. We both have a daily Starbucks habit. All of this stuff adds up.

Even with all of these expenses, we are doing just fine financially. We both max our our 401(k) and save at least a few thousand extra a month, plus a significant part of our annual bonus comp. But we certainly spend more money than we did when we were junior associates, shared a $3000 a month apartment, and thought that going out to a $150 date night was a luxury.

modern capitalism has been a disaster for the human race

[Bramwell]

Don’t see myself ever buying a BMW/Mercedes, but does Tesla Model 3 count? What about a $13k road bike?

[nixy]

Don’t see myself ever buying a BMW/Mercedes, but does Tesla Model 3 count? What about a $13k road bike?

Everyone can find ways to spend more on the things they like pretty easily, I’d bet.

[Lawman1865]

The time = money equation will start to go the other way. Rather than using your time to make more money, you'll realize that money buys more time, since biglaw will occupy the rest of it. In other words, if you value your personal time, you'll pay money for more of it. Some good examples in this thread of housekeeping services, laundry services, etc.

This is a huge point that people should realize contributes a lot to increased costs (in addition to some of the other things mentioned so far). When I was a student, taking public transportation was fine, I had a decent amount of extra time (although I'm sure I thought I was slammed then) and I would almost always save the $30-$50 by taking the a bus for an hour or two versus taking an uber. Same with dragging my laundry four city blocks to sit for 45-60 minutes to wash and dry my clothes. But at some point, time starts to become much more valuable than the corresponding dollars. This goes to services in your day to day life and on vacation. This is even more emphasized when you have a partner and possibly a child/children. Children are pretty darn expensive, and getting a nanny vs. sending to daycare and saving a few dollars can be a challenging decision.

Additionally, putting aside the money vs. time aspect, I think there is the expectation of "nicer" things or services as you get older. I loved the shoebox I lived in when I was single in the city, but there came a point where I wanted something a little more spacious/nicer when working so hard (some of that is having a partner, as you generally need to raise your standards to their level). To be clear, I still live much more frugally than most of my peers and family (eat in most of the time, don't go on expensive trips or activities, etc.) but between childcare/child expenses, NY rent, car payment and insurance, 401K and other miscellaneous expenses, etc., there is not that much left over.

I think the important thing is understanding what is really valuable to you and getting those things, but not going too far with it. In some ways life is about getting to enjoy the fruits of your labor, but I think being thoughtful about what fruits you pick, and which ones you really appreciate, can go a long way.

[Anonymous User]

I'm now about to be a fifth year.

Here are some major differences of my expenses as a 1st year vs. 5th year:

1. Housing: $1750/month vs. $5500/month ($2750/month split between wife and I).

2. Food: Average meal of ~$10-12/meal, mostly eating at Chipotle or similar restaurants vs. ~$30-40/meal.

3. Vacations: Took 1 vacation as a 1st year, total was probably ~$1-1.5k; take about 3-4 "vacations" a year (I work most of them and probably take only 1 real vacation a year) with each costing probably ~$1k.

4. Clothing: Had $200 winter overcoat vs. $400 winter overcoat; $250 fall jacket; $250 ski jacket

Coats are the things that come to mind, but this can be applied to my entire wardrobe. It's not that I've gotten so much more expensive in my tastes, it's just that I've expanded my wardrobe rather than wearing the same clothes all the time.

5. Transportation: I used to take public transport/walk vs. almost exclusively use Uber.

Some of the above are within my control (like I don't have to use Uber to get everywhere, and I could cook more/eat cheaper meals), but the bigger expenses items are things I can't really avoid. I got married and am expecting a kid, so we needed a bigger apartment, and housing costs have gone up quite a bit since 2018.

Vacations become crucial for mental health - as a first year, a 200 hour month was really busy. Now it's pretty standard, so I need to at least be somewhere else for a break. My favorite is flying out west, because then my days are generally over at 6-8pm PT, which means I can go out for dinner and feel like I'm on vacation/break.

[Anonymous User]

Buying a car to flex and not to enjoy the driving experience itself ... can't relate

[Anonymous User]

Maintaining an upper-middle class / lower-upper class lifestyle as you move from your 20s into your 30s and 40s (particularly the marriage + kids aspect) is expensive. IME that's where most of the "lifestyle creep" really comes from. You're suddenly paying $12,500 a month in mortgage + property taxes because you wanted to be close to work but have a "nice place" and "what's a few million anyway." Daycare or private school is eating $50,000 per year or more out of your budget. Well, we need two cars now and it's time to upgrade from the Toyotas to BMWs = $25,000 per year in car notes. Everyone needs a vacation to destress from biglaw = $20,000 (you had to fly business, right? Kids in Coach for 6 hours?) for a week getaway where you "only" billed 25 hours. Who even has time to think about how much we're spending eating out we're making a ton of money and don't have the bandwidth to cook = $30,000 per year on dinners. John's watch looked really cool and I haven't upgraded since the Tag I got in law school, I owe myself a gift, right? = $25,000. Etc. It's not hard for this to happen and it happens to many of us; it's frankly insidious and the long hours, stress, and natural process of moving through life and "stuff" happening all contribute to it.

Totally agree with the mortgage/childrearing comments, but in all seriousness, do people here actually spend $25K in differential for luxury car(s) or even a quarter of that on a watch? Maybe someone here and there, but these examples are thrown out so often I'm curious whether it happens more frequently than I thought.

Spending this kind of money on things like this that are not actually necessities makes no sense when you literally don’t have the money.

...

It also makes a difference if you’re living in a community where people spend this money - if all the parents picking up their kids at your kids’ school drive BMWs it becomes easier to buy a BMW. I don’t mean this in a “keeping up with the Joneses” way, just that if you’re surrounded by a practice, it starts to look normal. Here are these people who, like you, pay to send their kids to this spiffy school, and they probably live in a similar neighborhood, and they may well have similar jobs - if they’re driving a Beamer maybe you, too, are the kind of person who drives a Beamer.

I mean, psychologically I don't understand how this makes sense either. I'm not shaming anyone who wants to buy a fancy car just for the sake of having the fancy car. But buying one because everyone else is? I don't understand how anyone has the energy to care. I grew up pretty privileged in a well-off neighborhood and only knew like three of my neighbors by name. There were a good other 10+ houses within a three-five walking distance who I had no idea who lived in them. This remained true throughout my childhood up until college, and then my two years gap after college (when I was working but living rent free at my parents). And this isn't even NYC where (I'm assuming) the vast majority of junior and midlevels don't even own houses or live in suburbs.

I can somewhat understand the desire to flex net wealth. But that's the flex: having a shit ton of cash. Imo, seeing that number go down = less flex, even if I'm spending it on flashy items. For all I know, the [fancy brand name] watch Joe Blow was wearing who passed me on the street could have been a fake. Net worth reigns supreme.

First I want to say I admire your mentality. It's the sort of the mentality my father has and I think, setting aside folks who sell their startup for 30 mil, is required to build wealth. It also has a lot of "who cares what other people think" vibes to it, which I am totally for. So I say what I say just to offer a perspective.

I grew up in a very wealthy neighborhood, almost everyone's parents drove BMW's, Audi's or Mercedes. I haven't sat down and interviewed each of these families to understand their motivation to buy the car they ended up buying, but what I've seen is that virtually everyone earning above 300-400K a year will drive a mid-tier luxury car (5-series BMW, E-Class Mercedes, Audi A-6). Back when I was in high school, these cars would be in the 50-60k range, today its more like 60-75k. I found that it was actually very rare to see anyone dish out cash for an upper tier BMW, Audi or Mercedes (7 series, S-Class, or A8). At that spend, almost everyone drove Porsches.

I was always curious as to why this was, and this is what I currently believe. When I was in high school, a brand new Toyota Prius would run you between 35-40k. The difference in quality of life between driving that 35-40k car and driving a mid-tier Mercedes E-Class is huge. You actually get a ton more from that 15k (plus additional sales tax). As with anything, the returns diminish as you pay more. What is the difference between an E-Class and a S-Class? A Mercedes car salesman might try to tell you "a lot" and list features, but the reality is it's just a longer wheelbase as the car is more of a limousine meant primarily for corporate use transporting businessmen. You don't need that extra leg room to drive your 4 foot tall 5th grader to school. and the S-Class is like an additional 40-50k.

Basically, I believe that consumers are pretty rational. Where there is good value for dollar, consumer's will pay. You may be the rare person who finds no value in an E-Class Mercedes and you find that it is essentially a Honda accord. But for the vast majority of people who have driven one or sat in one, I think most would agree the difference in comfort is substantial. We only have so many years on this planet, so for many it makes sense to pay that extra 15k (or whatever the difference is today) especially when you are making 300k or 400k a year.

I live in a very expensive town and all my neighbors drive Land Rovers, Teslas and Porsches -- I don't even see that many BMWs/Mercedes. I drive a 20 year Oldsmobile -- it runs just fine and is plenty comfortable, but people have commented that they thought my car belonged to the housekeeper or gardener (that we don't have). It's all conspicuous consumption -- people try to justify it in various ways, but it comes down to wanting to fit in with your neighbors/peers. If you truly don't care what the neighbors think (and I don't understand why you would care at all what someone thinks about your car), it's easy to keep lifestyle creep under control, even while acknowledging unavoidable expenses, like many (but not all, see, e.g., private school in many places) associated with kids.

[Anonymous User]

One source of lifestyle creep can be an increasing number of dependents. Of course there's children, but there are other sources as well. As your income/wealth increases, you will find yourself with the ability to provide substantial help to friends/family members.

Perhaps you are lucky and don't have anybody in your life who can't pay their rent, but if not, you may feel an obligation to provide support to people in your life who can't support themselves for one reason or another or who have fallen on hard times. If not rent, there's also medical or funeral expenses that may fall to you if you are the most resourced person in the family. Another example is you might pay for a family member to travel to a family event/wedding who couldn't otherwise afford to go. When you go out to dinner with the extended family, you might find yourself as the one who foots the bill.

I'm not saying you should avoid bearing those sort of expenses, but it's something to be aware of for the future as you make financial plans. How much of it you are willing to take on is of course a highly personal decision. Very wealthy celebrities (especially folks who came from humble beginnings) have been bankrupted by feeling obligated to financially support an ever-extending circle of friends.

[Anonymous User]

I'm going to put a different spin on this: if you're more senior than a 2nd/3rd year and don't have lifestyle creep - what are you even doing?

The only reason to work in biglaw and put up with these insane hours, especially as a transactional lawyer, is for the money. You use that money to buy yourself nice luxuries (the nice house, the nice car, the nice vacation, the nice watch).

If entered biglaw just to pay off student loans and/or to set up a nest egg so that you could eventually take that government/PI/inhouse job, then you should have that done by your 3rd or 4th year max.

If you're more senior than a 3rd year, and still maintaining the same lifestyle you did as a 1st year, why are you still doing this job at all? Just go in house and be happy living in the suburbs, driving your Toyota, eating at the Cheescake Factory and taking vacations to Disney World. Nothing wrong with any of that - that's actually a better lifestyle than my family could afford growing up.

But I'm in this shit for the money, and I work too hard not to ball out.

[nealric]

I'm going to put a different spin on this: if you're more senior than a 2nd/3rd year and don't have lifestyle creep - what are you even doing?

The only reason to work in biglaw and put up with these insane hours, especially as a transactional lawyer, is for the money. You use that money to buy yourself nice luxuries (the nice house, the nice car, the nice vacation, the nice watch).

If entered biglaw just to pay off student loans and/or to set up a nest egg so that you could eventually take that government/PI/inhouse job, then you should have that done by your 3rd or 4th year max.

If you're more senior than a 3rd year, and still maintaining the same lifestyle you did as a 1st year, why are you still doing this job at all? Just go in house and be happy living in the suburbs, driving your Toyota, eating at the Cheescake Factory and taking vacations to Disney World. Nothing wrong with any of that - that's actually a better lifestyle than my family could afford growing up.

But I'm in this shit for the money, and I work too hard not to ball out.

One of the things you can buy with money is financial independence. You "buy" financial independence by not spending your money and accumulating wealth instead. Of course most people don't want to do the "FIRE" thing and retire at age 30 to van life, but a lot of people would rather have a couple million saved by 35 than drive a BMW and wear a Rolex. You can use that freedom to retire early, quit a job situation you don't like, or just buy peace of mind that you can handle whatever comes your way financially.

[Anonymous User]

I'm going to put a different spin on this: if you're more senior than a 2nd/3rd year and don't have lifestyle creep - what are you even doing?

The only reason to work in biglaw and put up with these insane hours, especially as a transactional lawyer, is for the money. You use that money to buy yourself nice luxuries (the nice house, the nice car, the nice vacation, the nice watch).

If entered biglaw just to pay off student loans and/or to set up a nest egg so that you could eventually take that government/PI/inhouse job, then you should have that done by your 3rd or 4th year max.

If you're more senior than a 3rd year, and still maintaining the same lifestyle you did as a 1st year, why are you still doing this job at all? Just go in house and be happy living in the suburbs, driving your Toyota, eating at the Cheescake Factory and taking vacations to Disney World. Nothing wrong with any of that - that's actually a better lifestyle than my family could afford growing up.

But I'm in this shit for the money, and I work too hard not to ball out.

One of the things you can buy with money is financial independence. You "buy" financial independence by not spending your money and accumulating wealth instead. Of course most people don't want to do the "FIRE" thing and retire at age 30 to van life, but a lot of people would rather have a couple million saved by 35 than drive a BMW and wear a Rolex. You can use that freedom to retire early, quit a job situation you don't like, or just buy peace of mind that you can handle whatever comes your way financially.

I had a couple million saved at 35 from biglaw.

Now I have 1.5 million saved

[nealric]

I'm going to put a different spin on this: if you're more senior than a 2nd/3rd year and don't have lifestyle creep - what are you even doing?

The only reason to work in biglaw and put up with these insane hours, especially as a transactional lawyer, is for the money. You use that money to buy yourself nice luxuries (the nice house, the nice car, the nice vacation, the nice watch).

If entered biglaw just to pay off student loans and/or to set up a nest egg so that you could eventually take that government/PI/inhouse job, then you should have that done by your 3rd or 4th year max.

If you're more senior than a 3rd year, and still maintaining the same lifestyle you did as a 1st year, why are you still doing this job at all? Just go in house and be happy living in the suburbs, driving your Toyota, eating at the Cheescake Factory and taking vacations to Disney World. Nothing wrong with any of that - that's actually a better lifestyle than my family could afford growing up.

But I'm in this shit for the money, and I work too hard not to ball out.

One of the things you can buy with money is financial independence. You "buy" financial independence by not spending your money and accumulating wealth instead. Of course most people don't want to do the "FIRE" thing and retire at age 30 to van life, but a lot of people would rather have a couple million saved by 35 than drive a BMW and wear a Rolex. You can use that freedom to retire early, quit a job situation you don't like, or just buy peace of mind that you can handle whatever comes your way financially.

I had a couple million saved at 35 from biglaw.

Now I have 1.5 million saved

It helps not to get too anchored to that topline number. The market never just climbs linearly forever. Keep up at that pace, and you will quickly reach a point where even a 50% drop doesn't change your financial security much. You are still doing way better than someone who has nothing but a couple hundred thousand saved because they blew the rest on BMWs and Rolexes.

[Anonymous User]

I'm going to put a different spin on this: if you're more senior than a 2nd/3rd year and don't have lifestyle creep - what are you even doing?

The only reason to work in biglaw and put up with these insane hours, especially as a transactional lawyer, is for the money. You use that money to buy yourself nice luxuries (the nice house, the nice car, the nice vacation, the nice watch).

If entered biglaw just to pay off student loans and/or to set up a nest egg so that you could eventually take that government/PI/inhouse job, then you should have that done by your 3rd or 4th year max.

If you're more senior than a 3rd year, and still maintaining the same lifestyle you did as a 1st year, why are you still doing this job at all? Just go in house and be happy living in the suburbs, driving your Toyota, eating at the Cheescake Factory and taking vacations to Disney World. Nothing wrong with any of that - that's actually a better lifestyle than my family could afford growing up.

But I'm in this shit for the money, and I work too hard not to ball out.

One of the things you can buy with money is financial independence. You "buy" financial independence by not spending your money and accumulating wealth instead. Of course most people don't want to do the "FIRE" thing and retire at age 30 to van life, but a lot of people would rather have a couple million saved by 35 than drive a BMW and wear a Rolex. You can use that freedom to retire early, quit a job situation you don't like, or just buy peace of mind that you can handle whatever comes your way financially.

I had a couple million saved at 35 from biglaw.

Now I have 1.5 million saved

It helps not to get too anchored to that topline number. The market never just climbs linearly forever. Keep up at that pace, and you will quickly reach a point where even a 50% drop doesn't change your financial security much. You are still doing way better than someone who has nothing but a couple hundred thousand saved because they blew the rest on BMWs and Rolexes.

Oh I'm well aware. Given how much net worth fluctuations used to freak me out when I was starting out, I'm pleasantly surprised and how I've handled the $700k drop over the last year. I still check it every day but it doesn't bug me.

[Anonymous User]

I live in a very expensive town and all my neighbors drive Land Rovers, Teslas and Porsches -- I don't even see that many BMWs/Mercedes. I drive a 20 year Oldsmobile -- it runs just fine and is plenty comfortable, but people have commented that they thought my car belonged to the housekeeper or gardener (that we don't have). It's all conspicuous consumption -- people try to justify it in various ways, but it comes down to wanting to fit in with your neighbors/peers. If you truly don't care what the neighbors think (and I don't understand why you would care at all what someone thinks about your car), it's easy to keep lifestyle creep under control, even while acknowledging unavoidable expenses, like many (but not all, see, e.g., private school in many places) associated with kids.

Fancy cars and watches are just some specific examples and obviously not everyone cares about those things. But not all luxury spending is purely conspicuous consumption - I mean on one level it is, because it’s unnecessary. But it’s not all about literally caring what your neighbors think. Take flying business class and staying in a nicer more expensive hotel in vacations - it costs a lot more but also results in a much much nicer experience that has nothing to do with what your neighbors will think of you, because how will they ever know?

And as someone who replaced a 15-yo car about 5 years ago, I hate to break it to you, but driving a new car is just a much nicer experience than driving a 20 yo car. Now admittedly much cheaper cars than a BMW or Porsche or whatever are still going to be nicer than yours because they’re new, so I’m not saying that buying a new car means you have to get a Mercedes. But it is human nature to want to buy the nicer thing/experience if you can afford it. If you aren’t surrounded by other people who have the nicer stuff, it’s easier not to want it than when you’re surrounded by people who do. The reason advertising works is that showing you nice stuff is a good way to make you want to buy nice stuff. This is why your community is a big deal (I think too that people keep equating community with literal neighbors because these ideas developed at a time when those were one and the same thing. If you live in a neighborhood full of people who drive Porsches but you don’t know or care about any of them, that’s different from if your social/friend group is full of people who drive Porsches).

And sure, some people don’t care enough about cars to want the nicer car, but it’s pretty normal to feel differently. I got a loaner a few models nicer than my car when it was in the shop recently and seriously considered for like half an hour whether I should trade up, because it was just genuinely nicer to drive. I decided not to because my car is fine, I don’t drive that much, and I don’t actually have biglaw money (just a lot more than I had before law school). But I can totally see why someone else with more money or different circumstances (like a bad commute or lots of road trips) would say “I’m going to pick the nicer car.”

Don’t get me wrong, I’m sure that on some subconscious level, public perception of the car (or whatever item) matters to many people, and informs our evaluation of what’s nice. People don’t pay more for jewelry from Tiffany’s because it’s literally nicer materials; branding is real. But honestly, luxury items are also often nicer in many ways. And when given the choice, lots of people are just going to pick the nicer stuff when they can afford to.

Since you don’t care about cars, substitute vacations, or other experiences (like theater or music or sports - attending or playing), or clothes, or tech gear, or TVs.

[Anonymous User]

I'm going to put a different spin on this: if you're more senior than a 2nd/3rd year and don't have lifestyle creep - what are you even doing?

The only reason to work in biglaw and put up with these insane hours, especially as a transactional lawyer, is for the money. You use that money to buy yourself nice luxuries (the nice house, the nice car, the nice vacation, the nice watch).

If entered biglaw just to pay off student loans and/or to set up a nest egg so that you could eventually take that government/PI/inhouse job, then you should have that done by your 3rd or 4th year max.

If you're more senior than a 3rd year, and still maintaining the same lifestyle you did as a 1st year, why are you still doing this job at all? Just go in house and be happy living in the suburbs, driving your Toyota, eating at the Cheescake Factory and taking vacations to Disney World. Nothing wrong with any of that - that's actually a better lifestyle than my family could afford growing up.

But I'm in this shit for the money, and I work too hard not to ball out.

One of the things you can buy with money is financial independence. You "buy" financial independence by not spending your money and accumulating wealth instead. Of course most people don't want to do the "FIRE" thing and retire at age 30 to van life, but a lot of people would rather have a couple million saved by 35 than drive a BMW and wear a Rolex. You can use that freedom to retire early, quit a job situation you don't like, or just buy peace of mind that you can handle whatever comes your way financially.

I had a couple million saved at 35 from biglaw.

Now I have 1.5 million saved

It helps not to get too anchored to that topline number. The market never just climbs linearly forever. Keep up at that pace, and you will quickly reach a point where even a 50% drop doesn't change your financial security much. You are still doing way better than someone who has nothing but a couple hundred thousand saved because they blew the rest on BMWs and Rolexes.

Oh I'm well aware. Given how much net worth fluctuations used to freak me out when I was starting out, I'm pleasantly surprised and how I've handled the $700k drop over the last year. I still check it every day but it doesn't bug me.

I'm guessing the increased financial security also lowers the work stress? Hoping to reach a similar level you're at as a current junior and am curious what it looks like on the other end.

[Anonymous User]

One of the things you can buy with money is financial independence. You "buy" financial independence by not spending your money and accumulating wealth instead. Of course most people don't want to do the "FIRE" thing and retire at age 30 to van life, but a lot of people would rather have a couple million saved by 35 than drive a BMW and wear a Rolex. You can use that freedom to retire early, quit a job situation you don't like, or just buy peace of mind that you can handle whatever comes your way financially.

I had a couple million saved at 35 from biglaw.

Now I have 1.5 million saved

It helps not to get too anchored to that topline number. The market never just climbs linearly forever. Keep up at that pace, and you will quickly reach a point where even a 50% drop doesn't change your financial security much. You are still doing way better than someone who has nothing but a couple hundred thousand saved because they blew the rest on BMWs and Rolexes.

Oh I'm well aware. Given how much net worth fluctuations used to freak me out when I was starting out, I'm pleasantly surprised and how I've handled the $700k drop over the last year. I still check it every day but it doesn't bug me.

I'm guessing the increased financial security also lowers the work stress? Hoping to reach a similar level you're at as a current junior and am curious what it looks like on the other end.

Not really, no. Biglaw was very stressful no matter how much I had in the bank. Always being on call, trying to create perfect work in limited time, the feeling of falling behind on your hours or your peers when you're not billing, all of those things are stressful no matter how much money you have in the bank.

I left biglaw a while ago, though, and in-house is much less stressful. There is stress, of course, but it's stressful in different ways and much less stressful on the whole.

[Anonymous User]

I'm going to put a different spin on this: if you're more senior than a 2nd/3rd year and don't have lifestyle creep - what are you even doing?

The only reason to work in biglaw and put up with these insane hours, especially as a transactional lawyer, is for the money. You use that money to buy yourself nice luxuries (the nice house, the nice car, the nice vacation, the nice watch).

If entered biglaw just to pay off student loans and/or to set up a nest egg so that you could eventually take that government/PI/inhouse job, then you should have that done by your 3rd or 4th year max.

If you're more senior than a 3rd year, and still maintaining the same lifestyle you did as a 1st year, why are you still doing this job at all? Just go in house and be happy living in the suburbs, driving your Toyota, eating at the Cheescake Factory and taking vacations to Disney World. Nothing wrong with any of that - that's actually a better lifestyle than my family could afford growing up.

But I'm in this shit for the money, and I work too hard not to ball out.

One of the things you can buy with money is financial independence. You "buy" financial independence by not spending your money and accumulating wealth instead. Of course most people don't want to do the "FIRE" thing and retire at age 30 to van life, but a lot of people would rather have a couple million saved by 35 than drive a BMW and wear a Rolex. You can use that freedom to retire early, quit a job situation you don't like, or just buy peace of mind that you can handle whatever comes your way financially.

I had a couple million saved at 35 from biglaw.

Now I have 1.5 million saved

It helps not to get too anchored to that topline number. The market never just climbs linearly forever. Keep up at that pace, and you will quickly reach a point where even a 50% drop doesn't change your financial security much. You are still doing way better than someone who has nothing but a couple hundred thousand saved because they blew the rest on BMWs and Rolexes.

Oh I'm well aware. Given how much net worth fluctuations used to freak me out when I was starting out, I'm pleasantly surprised and how I've handled the $700k drop over the last year. I still check it every day but it doesn't bug me.

I'm guessing the increased financial security also lowers the work stress? Hoping to reach a similar level you're at as a current junior and am curious what it looks like on the other end.

It does not lower work stress. Work will get increasingly more stressful each year. Your junior years are the easiest unfortunately.

I'm the OP who mentioned that I'd rather enjoy the extravagances than be wary of lifestyle creep. Personally, I think the argument of "financial security" is somewhat nonsense.

First, everyone is maxing out their 401Ks and should have a decent piggybank of at least a couple of hundred thousand dollars invested in the market outside the 401K. Pretty much every midlevel/senior has at least that.

Second, by the time you're fourth year corporate associate - there really is no risk that you will starve. If you get fired/quit, you will be able find another firm that will take you in or go in-house. Maybe the search will take longer than you want, but you'll have the savings to wait it out. Any position you get will earn you at least 150K at minimum, so you will be fine. Unless this is a great recession/depression scenario, your financial security isn't really threatened, and even if it is a great recession/depression scenario, you're still in a better position than like 95% of society.

The people who slave away at biglaw and don't enjoy their money/lives, are typically addicted to watching their bank account grow. These guys are viewing it as a video game trying to get some kind of high score. It doesn't matter whether they have $5mm or $1mm, they're never gonna use any of it. I understand wanting to set your family/kids up, but I can't understand this mindset of scarcity where every dollar must be cherished and scrupulously accounted for.

[Res Ipsa Loquitter]

The term “lifestyle creep” implies that the lifestyle is creeping up on the associate, who is caught unawares.

Sounds like a soft, low accountability mindset. You can spend or not spend your salary on whatever you want. Don’t make a decision and then pretend to be a victim

[nealric]

The term “lifestyle creep” implies that the lifestyle is creeping up on the associate, who is caught unawares.

Sounds like a soft, low accountability mindset. You can spend or not spend your salary on whatever you want. Don’t make a decision and then pretend to be a victim

I think the term was invented because small and medium spending decisions can pile up in ways that catch people unaware. Also, decisions like moving from an apartment to a single family home can trigger spending down the line that people might not necessarily think about when they buy a house.

For example, you might switch from driving a Honda to a BMW. You be thinking that the Honda payment was $400/month and the BMW is $600 a month, so your net spending went up $200 a month. But actually, the BMW will depreciate more, uses more gas (and premium gas), increases your maintenance and insurance costs, and has more expensive consumables like brakes/tires. Your "real" spend may actually be going up by $400 a month (or double what you thought it does).

You might go from an apartment that is fine with fairly basic furnature to a house, where you buy a lot more furniture, spend $100/month on yard maitenance, have to deal with appliances braking, property taxes, HOA fees, and find that going from a $2,000/mo apartment to a $3,000/mo mortgage was actually a $2,000/mo spend increase.

Suppose you did both those things (bought a BMW and a house): your spending budget while living in your 1br apartment close to work was $4,000. Now, you've just increased your baseline cost structure to $6,400 a month. Suppose now that you have the house in the burbs you decide to have a couple of kids on top of that. A cheap full-day daycare costs at least $1,500 a month per kid. Add other misc kid expenses, and there's another $3,600 a month of spend.

So in a short 3-4 year period, you can go from a baseline spend of $4,000 a month to $9,000 a month. During that period, it may not feel like you've greatly increased your luxuries. You aren't dining at Michelin star restaurants every week or staying at the four seasons on vacation. You didn't even buy a fancy watch. But you've gone from a spend that would be reasonable on a $100k income to one that demands over $200k to maintain a similar savings rate. Now, that $180k/yr in-house job looks a little tight so you think about putting in another year or two of biglaw...

That's how it gets you.

[comingoffalittleshy]

If anyone has parents or grandparents who grew up during the depression, they have passed down values that have been absorbed by you, often without you being conscious of it. My grandmother would make one teabag last 2 days.

When I had $5m, I would also do that. Much to the amusement of my friends.

[QwertyKeys]

What others have said: family and kids is the biggest increase in spending.

I am pretty frugal. Lived with roommates as a junior associate, paid off loans quickly, regularly saved 40-50% post tax money.

Now I have a spouse and kids. We moved to the burbs of a VHCOL city for more space, schools, etc. House cost $2M, property taxes are $25k a year.

Being in the burbs meant we did not have reliable public transportation and our lives were no longer walkable. A second car is $50k (mid tier SUV that can fit two kids) plus gas and insurance.

We have an infant. There is a two-year waiting list for day care. It costs $38k per year. So we needed to hire a nanny. In my area, experienced infant nannies ask for $35-40/hr. So for 40 hours of coverage, we are paying ~73k/year. You also need to buy workers comp insurance, payroll company, and pay sick days, vacation, PTO. If nanny is sick, you need to pay nanny and pay a babysitter (or stay home and watch a baby). If you do not have family nearby, the cost of raising kids in the early years is exorbitant.

As for the pre-kid lifestyle creep, not much changed for me. I am not a fancy person and prefer a burger and beer over a five course meal. The major exception is if I buy tickets to a concert or sporting event, I pay to be close to the action. My days in the nosebleed seats are over. But with work and kids, those don’t happen too often anymore.

Why does your wife work?