What are some examples of lifestyle creep? Forum

[Anonymous User]

There's a lot of warnings against lifestyle creep but I was curious what realistic examples of this are. Not looking for facetious comments like gucci bags or ferrarris (although I understand the sentiment that some people spend more than they should buying big item tickets regularly). Instead, it would be helpful knowing about less obvious spending increases (i.e., expenses that actually "creep"). FWIW, working in NYC so I imagine food/eating out would be the biggest creep. But doing the math, a first year could max their 401k and save around $2-3K/mo and still have $50-80 a day to spend on whatever (factoring EOY bonus in and assuming rent ~low $4K/mo)*. A decent DoorDash meal would probably run around $30, so I'm curious how other expenses might creep since eating out every day won't put someone in the red.

*Adjust for loans/personal/medical needs.

[Anonymous User]

There's a lot of warnings against lifestyle creep but I was curious what realistic examples of this are. Not looking for facetious comments like gucci bags or ferrarris (although I understand the sentiment that some people spend more than they should buying big item tickets regularly). Instead, it would be helpful knowing about less obvious spending increases (i.e., expenses that actually "creep"). FWIW, working in NYC so I imagine food/eating out would be the biggest creep. But doing the math, a first year could max their 401k and save around $2-3K/mo and still have $50-80 a day to spend on whatever (factoring EOY bonus in and assuming rent ~low $4K/mo)*. A decent DoorDash meal would probably run around $30, so I'm curious how other expenses might creep since eating out every day won't put someone in the red.

*Adjust for loans/personal/medical needs.

8th year biglawer - mortgage, eating, gifts, vacations creep very easy. When I was a first year my monthly mortgage was $3000/month...now it is $6000 (needed a bigger house because of kids). When I was a first year date nights were still relatively affordable places around town (even things like olive garden, macaroni grill, etc.) now each date night is somewhere nice (where we live has tons of great options, but a dinner out for 2 is usually $250 with wine/drinks/etc). You also just buy nicer shit as you get older. You want to get your spouse a nice gift, you can't do that with a $100 purse, now you are looking at the name brands. I think a lot of this happens as you get older and have kids, but when you make this much and grind as hard as biglaw does, there is this feeling of treat yourself when you have time. I used to say I would never have lifestyle creep (my parents never made even as much as I did as a first year), but I basically spend what I make minus like $2k a month that goes to my brokerage.

[Anonymous User]

How you spend money is a symptom, and it’ll differ for everyone. Your mindset is what drives lifestyle creep. Keep an eye out for these kinds of thoughts:

- All my friends and colleagues are living here / buying that / going for vacations there.
- I work hard, I have earned it.
- My income potential is high, why am I worried about this small purchase?
- I’d be embarrassed to show my face in that house or car.
- I’m an X year lawyer in biglaw. Why do I want to continue to live like a student?

Add children and a spouse who enjoys living comfortably into the mix, and it can be tough to keep under control. I’m not saying it’s wrong to enjoy the fruits of your labor by the way, just answering your question.

[Anonymous User]

There's a lot of warnings against lifestyle creep but I was curious what realistic examples of this are. Not looking for facetious comments like gucci bags or ferrarris (although I understand the sentiment that some people spend more than they should buying big item tickets regularly). Instead, it would be helpful knowing about less obvious spending increases (i.e., expenses that actually "creep"). FWIW, working in NYC so I imagine food/eating out would be the biggest creep. But doing the math, a first year could max their 401k and save around $2-3K/mo and still have $50-80 a day to spend on whatever (factoring EOY bonus in and assuming rent ~low $4K/mo)*. A decent DoorDash meal would probably run around $30, so I'm curious how other expenses might creep since eating out every day won't put someone in the red.

*Adjust for loans/personal/medical needs.

8th year biglawer - mortgage, eating, gifts, vacations creep very easy. When I was a first year my monthly mortgage was $3000/month...now it is $6000 (needed a bigger house because of kids). When I was a first year date nights were still relatively affordable places around town (even things like olive garden, macaroni grill, etc.) now each date night is somewhere nice (where we live has tons of great options, but a dinner out for 2 is usually $250 with wine/drinks/etc). You also just buy nicer shit as you get older. You want to get your spouse a nice gift, you can't do that with a $100 purse, now you are looking at the name brands. I think a lot of this happens as you get older and have kids, but when you make this much and grind as hard as biglaw does, there is this feeling of treat yourself when you have time. I used to say I would never have lifestyle creep (my parents never made even as much as I did as a first year), but I basically spend what I make minus like $2k a month that goes to my brokerage.

Appreciate the response. The mortgage doesn't seem so much as a lifestyle creep as a reasonable expenditure -- the increase in house size was a one-time big item purchase (despite monthly payments) justified by the need for more living space.

Vacations and gifts are good points (my partner and I aren't very big on gifts fortunately but I can see how some people might start leaning into big brands gifting). The food is a bit excessive imo (but my partner and I don't drink). Even then, a good date night out for us would probably run $70-90 two or three times a month max (other than the usual ordering out/doordash).

It's funny cause I take the position you had when you first started (how could I spend that much) but maybe I'll also end up eating my words, who knows.

ETA: just realized this probably comes off as judgy, which I don't intend. People are obv free to spend their money how they want. Just voicing out my thoughts right now in case these were how others felt before experiencing lifestyle creep.

[washdc2012]

It’s also adding services your life which becomes more common as you have less time, often from having kids. Nanny vs daycare, grocery delivery, housekeeper, landscaper…things you can’t/don’t want to do yourself. Also just buying slightly nicer things as you get older - slightly nicer clothes, slightly nicer cars (not a Ferrari, but a Volvo instead of a Honda) - by your mid 30s and with a high income it’s easy to feel like you *should* have these things even if you don’t need them. And the more your surround yourself with circles of people with similar incomes, the more it happens (through your work environment, neighborhood, private school, etc).

[Anonymous User]

How you spend money is a symptom, and it’ll differ for everyone. Your mindset is what drives lifestyle creep. Keep an eye out for these kinds of thoughts:

- All my friends and colleagues are living here / buying that / going for vacations there.
- I work hard, I have earned it.
- My income potential is high, why am I worried about this small purchase?
- I’d be embarrassed to show my face in that house or car.
- I’m an X year lawyer in biglaw. Why do I want to continue to live like a student?

Add children and a spouse who enjoys living comfortably into the mix, and it can be tough to keep under control. I’m not saying it’s wrong to enjoy the fruits of your labor by the way, just answering your question.

Appreciate the pointers, thanks!

[Sad248]

How you spend money is a symptom, and it’ll differ for everyone. Your mindset is what drives lifestyle creep. Keep an eye out for these kinds of thoughts:

- All my friends and colleagues are living here / buying that / going for vacations there.
- I work hard, I have earned it.
- My income potential is high, why am I worried about this small purchase?
- I’d be embarrassed to show my face in that house or car.
- I’m an X year lawyer in biglaw. Why do I want to continue to live like a student?

Add children and a spouse who enjoys living comfortably into the mix, and it can be tough to keep under control. I’m not saying it’s wrong to enjoy the fruits of your labor by the way, just answering your question.

I think also convenience is a big driver. "Why would I take the metro if I can take an Uber? Why would I take the Grey Hound if I can take Amtrak? Why would I make not get a TaskRabbit for this IKEA furniture? Why would I not get a cleaner for my apartment? Why not get Audible/Netflix/Spotify?" I think it is very important to jot down what is actually important to you and what isn't and what you're willing to spend.

And indeed, as you said, it is also the expectation of people around you. The amount of times I've heard people I know around me subtly be like "Hey, you're the hotshot lawyer here!" like that supposedly means I am the one that has to pay for stuff. I think you can even put that pressure on yourself a bit too, like "Well, I can afford to spend a bit more unlike them, so I guess I should make this my treat..." I think also romantic partners also get this sense a bit. Like it can be hard to show up with a $50 birthday gift if they know you make $250k a year.

[Anonymous User]

Delivery for 2 in NYC is not $30 unless you’re doing literal fast food. Food and drink and traveling for weddings and holidays is what gets me. For others it’s clothing, vacations/travel, and furnishing their apartment. I spend a decent amount on Ubers/taxis, apartment cleaning person, my dog, tipping my building’s employees at holidays—basically things you don’t think to put into your budget when you’re a new associate. There are so many hidden $100 expenses and people overestimate what a first year paycheck looks like when direct deposited (after benefits + full 401(k) and HSA/FSA)

Also, watch your monthly fees because they add up: phone, internet, streaming, gym, don’t do monthly fashion passes things, etc. Finally, keep your credit card annual fees in check (don’t need Amex platinum and chase sapphire)

[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.

[Anonymous User]

Not in biglaw, but have definitely seen my income go up quite a bit over the last few years, and have been kind of amazed at how easy it is to increase your spending to your income. A lot of it is just buying nicer or more of things you’d normally buy. So for instance when I was in law school, I never paid more than maybe $70 on shoes. Now I can justify spending $200. I could find $40 pants, but I buy the $129 pair because they’re nicer and I can. I like earrings and can spend more on each pair/buy more often. I have some hobbies where I used to be careful about buying supplies, but now I buy more often and nicer ones.

I agree about food and vacations, too - we go to nice restaurants and get all 3 courses. We splurged on business class flying to Europe this summer, which was about 4x the cost of economy, but again, we *could* afford it and it was so so so much better than economy.

We absolutely don’t need to spend this much money on any of these things. But stuff that you don’t even consider because you literally can’t afford it suddenly looks a lot more reasonable when you can. I’m sure there are some people who are able to keep the same definition of “too expensive” as their income goes up, but I think it’s a pretty big part of human nature to change your standards.

[Anonymous User]

Thanks for all the replies and perspectives!
(And just to be clear, the $30 per DD meal is per individual, I was doing the math from the pov of a first year who is single/dating someone who is also earning income (no disrepect either way)). $30 for two people would be the dream

[Anonymous User]

I'm about to spend $300+ on a date.

Now I understand why everybody's single.

When I was a first year date nights were still relatively affordable places around town (even things like olive garden, macaroni grill, etc.) now each date night is somewhere nice (where we live has tons of great options, but a dinner out for 2 is usually $250 with wine/drinks/etc).

I take my working immigrant parents to Olive Garden: they love it, and I love it. Each time, our total bill comes out to $60.

All my female law school classmates are from upper middle class F-U money backgrounds and wouldn't be caught dead in an Olive Garden. What kind of women were you dating?

--

Poster above mentioned Amtrak v. Greyhound. I'm about to pay $115 for an Amtrak ticket when I could be paying $30 for a MegaBus ticket. I haven't made the purchase yet, but I will soon, but it's bothering me so much. Perhaps the probability of getting sucker punched and infested with bedbugs is less on Amtrak, but IDK. I routinely rode the bus when I was in college.

Another example from me: my parents are still using really old iPhone 8s that are obviously on their last legs and can't hold a charge. I recently decided to buy them each a used iPhone 12 Pro Max--these are $600, rather than the $1,100 it costs for the newest variant. But it really bothered me that my parents didn't have nice things, and it never would have occurred to me to throw out that kind of money to do something nice for them.

IDK, you eventually realize, you work so hard, why does life still suck, and can you spend money to make it suck less? Yes, to an extent.

I still can't imagine ever going on a nice vacation or buying a house, or even an apartment, unless I marry into money, but I'll probably die alone.

[Monochromatic Oeuvre]

In addition to everything above:

1. People’s expectations of you will change if they have any idea what you make. It’s most acute for a romantic partner, family, or friends. You’re under pressure to buy nicer gifts, pick up the tab at dinner, be the one who pays for a plane ticket. My budget for things I don’t want but buy to avoid pissing someone off is thousands more than it was before I had this job.

2. Over time your friends will make more money (and if you’re like most people in Biglaw, your social circle was probably already mostly comprised of white-collar professionals) and that will change what people decide to do together. I’d much prefer to just grab some beers and hang out at someone’s house like we used to in school, but everyone wants to go get some craft cocktail now. I like going places with my friends but we sure as shit could not have e.g. all taken a Vegas trip five years ago.

3. Sometimes you will have new expenses that derive from physical changes that are not even anywhere near the level of a disability. I don’t fly places and stay in decent hotels just because I can afford something nicer or think I should be advancing to a higher standard of living. It’s more that after a long bus ride I might be sore for days, and some bullshit at the Motel 6 that makes it impossible to sleep would really make it hard to function for the day. Neither of those things were true when I was 22.

[Anonymous User]

I take my working immigrant parents to Olive Garden: they love it, and I love it. Each time, our total bill comes out to $60.

All my female law school classmates are from upper middle class F-U money backgrounds and wouldn't be caught dead in an Olive Garden. What kind of women were you dating?

Maybe ones like you?

[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.

[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.

[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.

I mean...yes? Most of the partners are going to be driving pretty decent cars and not a Honda Accord. Not sure how that filters down to the associate level, but once you start consistently making a lot of money you definitely will naturally move into an upper middle class + lifestyle (especially if you hate your job and are only doing it for the money).

[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. But if you actually do have the money - and working biglaw you will - it suddenly seems a lot more reasonable. It’s not actually that hard not to buy nice things that are completely outside your means (though obviously people do - see personal bankruptcy). It’s way harder to not buy nice things that are within your means.

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.

[Anonymous User]

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.

[DukeMountain]

It’s uncomfortable how very easy $100 purchases that are no big deal, add up over the course of a year

[Anonymous User]

The progression of life is responsible for my lifestyle creep, as noted by everyone else. Aside from mortgage and childcare costs, another hefty cost is care for aging parents. Middle-aged folks such as myself are the sandwich generation, bearing the costs for the generation below and above us. Inflation ain't making it easier, either.

[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.

[comingoffalittleshy]

I no longer take my cans to the recycler for a cash voucher

[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.

[Anonymous User]

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.

I'm the anon quoted above. If net worth is the flex, you may not fall into this mentality. But I'm just saying I was pretty surprised at how easy it was to spend more than I'd have ever considered reasonable once my income increased.

And what I was trying to suggest above is that it's *not* because you *care* what other people drive, more that just what you see around you has more influence than you realize. As for what I mean by what you see around you - I mean your personal community rather than just the people who literally live near you. If you have kids and send to an expensive private school, you are going to get to know the other parents who do as well (you just are). You are likely to socialize with a particular group of people. If they have that kind of money, they are likely to have the spending habits that go along with it. Again, you may not care or be influenced in any way, but it is actually surprisingly easy to be influenced. I don't really know how else to describe it because it's kind of one of those things that you don't at all get until you experience it yourself (or at least that was my feeling). My main point though isn't that you're buying the BMW to flex, you're buying the BMW b/c it will come to seem normal to drive a BMW.

To be clear, I agree that the most significant drivers of lifestyle creep are getting married and having kids, in that the biggest budgetary changes will be for housing, day care, kids' school, and the like. I think things like luxury cars or watches and expensive vacations operate pretty much on the margins, so I've been talking about what's a pretty small psychological shift in the grand scheme of things. I don't personally have kids, so this kind of normalizing of more luxury spending is how lifestyle creep has played out for me.

Anyway, if you're currently working in biglaw making $300-400k+ and none of this make sense to you, congrats, you have a different kind of compass guiding you. If you're not currently in that situation, it might make sense just to wait and see what happens when you are.