113 - Why You Still Feel Broke Even If You're Making More Money

Why do so many people make more money… and still feel broke?

This episode breaks down lifestyle creep—the silent killer of financial independence. We explore how your spending habits inflate with your income, why it’s so hard to notice until it’s too late, and what you can do to stop it before it wrecks your ability to save, invest, or retire.

📈 From goldfish metaphors to paycheck-to-paycheck stats, we unpack:

• What lifestyle creep looks like in real life
• Why raises don’t always make you richer
• How social pressure + FOMO fuel overspending
• Simple strategies to avoid the creep
• Emergency fund vs. Fun fund—yes, you need both

If you’ve ever thought “I should have more to show for what I make”… this one’s for you.

🔐 Learn how to take back control of your money—and actually feel financially free.

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**DISCLAIMER**
Ticker metrics change as markets and companies change, so always do your own research. The content in this podcast is based on personal experience and is for educational purposes, not financial advice. See full disclaimer here.

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Transcript

Welcome to roaming returns a podcast about generating a passive income with dividend stocks so you can secure your finances and liberate your life. 

Today we’re talking about a problem that quietly wrecks more financial futures than any market crash: lifestyle creep. You get a raise, you spend more. Seems harmless—until you realize you’re still broke, just at a higher level. In this episode, we dig into the psychology behind lifestyle inflation, how it shows up, and why it's killing your shot at financial independence. Plus, we share how to spot it, stop it, and actually build a life you don’t need to finance.

Right, so goldfish, the nefarious goldfish or the illustrious goldfish. Do explain what the heck goldfish means again, if you weren't, if you didn't tune into the end of last week's episode. Well, I had a theory about people.
I called it the goldfish theory for like years. The simplest terms were people like goldfish would expand their territory to fill their fish tank. Um, we see it all the time in the condo.
If there's an empty table, Carmel goldfish and fills the table up. Um, people do it with their houses. They'll fill stuff.
They'll fill their houses up with crap. And then they'll have to expand their fish tank to include a garage or a storage unit with their yards. Like, I mean, but I guess it actually has a technical term.
It's called the lifestyle creep or a lifestyle inflation, whichever, whichever one makes you happier. I feel like it's probably a better term where you're spending increases as your income rises. It's a gradual and often unconscious tendency to spend more on non-essential items and experiences as you earn more money.
Prime example would be eating out more often. Like, um, when you're poor, you eat out like once a month. When you have more money, you eat out like once a week.
And if you have more money, you eat out like five times a week. That's lifestyle creep. And so basically how it works, why is it important to your job? It's important because it like, it can complicate your financing and your budgeting.
Yeah. So the whole reason this is important, this is one of the reasons and excuses people make for never having enough money to start investing. So it's a major, major, major thing we're going to dive into so that it's a complete, like skewed perspective and it creeps up on you.
Yeah. So basically there's basically the, there's like, it's a four-step process. Uh, first step is you get more money at work.
You get a raise bonus or higher paying job. You're actually earning and you're getting more income. Second step is increased spending.
You start spending more on of that extra money on things that enhance your lifestyle, such as dining out or buying new nicer clothes or upgrading your car home. And I'm pretty sure most people justify that because they're like, Oh, I've been deprived all this time. And now that I just got this bump and raise, I'm going to start, you know, get that TV I wanted or get that car that I really feel like I've earned or whatever.
And then it kind of, because you're not putting the emphasis first on investing first and then using the difference to do those things like you, you then again, have no money left for, it's like putting the wrong things first. And yeah, it just becomes this thing. Upgrading life becomes then your new normal.
The third step in this process is you have stagnant or decreased savings because you're spending more. You may not be saving as much as you used to when you made less or that, or you're not saving as much as you should be despite your hurting or your higher income. What they've actually found is people that make more money actually save and invest less than they did when they were quote poor.
Fascinating. That is something I did not know. I thought it would, that they stayed at the same thing.
And I'm assuming what they're doing is they're using it as a percent of income. So the percent that they're investing per their income is going down, even though it's technically the same quantitative number will be my guess. It actually is what they, what they do.
If you want to know, like I read up on this is it's not about the saving versus or investing versus spending. It's that they're putting a lot of times they'll put their new expenditures on credit cards. So they're basically wiping out their 6% raise because they're putting their extra expenses on a 25% credit card.
So they don't have as much money left over because they're spending more on interest than they did before. It's two people are cray cray. So they're not even spending the new money they have.
They're going above and beyond to equate the new spending to the payout for the credit card. That is the dumbest thing I've ever heard. If you're one of those people, I apologize, but you needed to hear it.
And the fourth step in this process is delayed financial goals. This can hinder your progress towards long-term financial goals, like buying a house, paying off debt or saving for retirement because you basically are going from, I make 10% more than I used to. Then you start spending 12%.
So you're actually down 2% because you're spending 12% of your 10%. So you're not even, you don't even have money left over to say. Yeah.
That's why David Bach always, like, I completely agree with him. You put your savings and shit first. You don't do it as an afterthought.
What happens, like, if you want to know what the psychology behind it is, people don't even know it's happening. That's the biggest problem. Yeah.
What you're not aware of eats away at your stuff. So there's four main reasons that I could come up with why it actually happens. The first is it feels natural to want a better lifestyle as you earn more.
It's a reward for hard work, that whole, I deserve a crap that we went through, like on a podcast like that. I deserve it. That entitled mentality actually is very damaging to your future self.
The second reason that it happens is social pressures. You might feel the need to keep up with friends or colleagues who have similar lifestyles. So like if you work with someone, you guys are making the same amount of money and they have a nice house and a nice car.
For whatever reason, you got that group mentality where I have to have a nice house, a nice car, because the same person I work with who makes the same amount of money has one. One of the things I have read in several of the books that talk about like the millionaires and like wealthy and rich, true wealthy people, you don't see it because they're putting their money into stuff that grows, not their actual lifestyle and luxury. So there's this fallacy that seeing that people have things is actually the sign of true wealth, when in actuality, if you're mimicking those people, you're getting the same result as them and you're getting debt, aka not well.
What's the number one rich person car? Toyota Camry. Yeah. And Camrys aren't luxurious.
It's not a Mercedes. They don't say, hey, this person has a million dollars in the bank, look at them with this fancy Camry. It's not a Mercedes.
It's not a freaking BMW. It's not a Maserati. Camry.
It's a Toyota. Camry, Corolla, whatever it's going to be. The third reason that it happens that I could come up with was ease of access to credit.
This is a big one. Because you make more money, credit cards and loans are made easier and they actually can come with increased spending limits without immediately feeling the financial impact. So basically because you make more money, your limits are higher on your credit card.
So you can then go from like, when I was poor and had bad credit, my credit cards maxed out like $1,200. Like if I made a lot of money, my maximum limit would probably be like $5,000 or $10,000. And then you max it out.
And then you're spending all your raise paying off the maxed out credit card. So what a lot of like, well, a lot of people in the lifestyle creep, what they'll do is they'll buy a nice house and then they'll get a HELOC or they'll refinance to get money back and reset their payments. Like we discussed the refinancing.
And I'm going to say this again. If you, debt inherently is not bad or good. Debt is only a good thing if you're taking it on to create more money, to earn more money.
If you're doing anything to actually create a lifestyle, it's actually a liability, not an asset. So even so technically your mortgage falls into the liability category, technically by that standard. But that's the difference between the wealthy mindset and the freaking average people who want to be wealthy mindset.
Just FYI. Wealthy people will take on loans to buy rental properties that they're getting a passive income from the rental property. Exactly.
Whereas normal people will take on a loan to go on vacation. So they're taking their whole year to pay off their vacation. Or they'll take out a loan to upgrade their house, which they didn't actually necessarily need to do because they're not selling it.
So you're not getting a return on profit. Now, if you take out a loan to upgrade your house to sell it, that's completely different situation. So it's the variables that matter.
And if you've been paying attention on our YouTube channel to our mini series about our Kony experiment, where we took out a loan to actually put it into investments to pay back, use the payments to actually pay that back, that is a higher strategy. And it's actually what wealthy people do, where they leverage and use interest rate arbitrage to acquire more assets. Well, not to toot your horn, but Cray Cray woman here found another way for us to actually take on more debt.
So the two options are we can get a HELOC on the other property and they use the HELOC to just dump into investing, or we can actually use our portfolio and leverage our portfolio to get a loan on our portfolio that we can then siphon through a third party to put into investing. But it's at a lower interest rate. So it's not that I'm going to take on more debt, we might be actually to take our Cony experiment and go from a 17% interest rate down to a 7% interest rate.
And the difference in the interest would actually benefit us for the payout in the long run. But the fact that a HELOC, it came from the HELOC question, and this is where my GPT shot some stuff out. And I was like, oh, so this is where like your GPTs can sometimes give you stuff you don't even know exists.
But a HELOC, because we're in an interesting situation where we don't have normal W-2 income, not really. Normal banks will make us go through like ridiculous hoops and or they'll reject us outright, even though my credit score is like damn near 850. They do not like the fact that we have investing income, dividend income and rental income as the only source they would actually downgrade that and make it really, really hard or like a pain in the ass.
Well, I just found out that Schwab allows you to apply for a pay loan, or I think it's called a Powell loan. And what they'll do is they'll rank your investments based on different categories. So like the risk, like our high yield ETFs are going to be riskier.
So they'll only like probably qualify for a 30% versus a 50% of the ability to loan out. And then they literally just use your investment account value. And it sounds like they like maybe just do a light pull on your credit.
And they just basically give you a line of credit through your investment thing, which is absolutely hilarious. But you do have to be careful. So our collateral for the loan will be our investment account, but we're actually going to use the investment account to actually.
But if it goes below a certain amount, they require like a margin call. So that is the sketchy part. So we would be taking out way less than that thing just to cover our asses.
But I'm probably going to do that because it's 10% difference in interest. A loan that's collateral on our investments, we're actually going to use to actually strengthen our investments. So it's, but you have to go through like.
Yeah, you're not allowed to directly invest. But you can pay off other debt. So you could use the, yeah.
Apparently it's a thing. It'll be interesting when that happens. There'll totally be a series on that.
I'm assuming. Yes. And then, okay.
Back to what I was talking about. The fourth reason that it happens is just a lack of awareness. I mentioned this earlier, the spending creeps up on you without you realizing how much you're spending has actually increased.
So that's like where it gets the lifestyle creep. What is it? Misnomer? I don't know what the word is. Misnomer? Misnomer, whatever.
Is that what you were trying to say? That's where that happened. I don't know what I was trying to say. So let's go to what a couple of examples or signs of a lifestyle creep would look like.
If you're living paycheck to paycheck, despite a good income, you have less money than expected at the end of the month. And you're not where it went. That is a pretty good indicator that you have a lifestyle creep in your life.
But this goes back to that whole budgeting thing. I personally think budgeting is super annoying and it doesn't need to be consistent. But if you constantly are overspending, you need to have awareness of why that's a thing.
Where's your drain? So I would think it's more of like the auditing. You should be doing quarterly audits to make sure you're in line with your shit. And clearly people would rather like ostrich head in the sand.
And that's how these things creep up on you. It's never the fact that you have like a massive expense. It's like death by a thousand cuts.
Generally, but it's like death by a thousand discretionary income or discretionary spending cuts. Death by a thousand cuts. The one that I keep bringing up that I can't get over.
I'm sorry. That literally makes no sense to me. I don't like coffee, but like, why would you ever pay $7 a day for coffee when you could just spend a hundred dollars to get a good coffee maker that you could then take with you to work? You're, you're going to have a one-time expenditure of a hundred dollars for the coffee maker, then whatever it costs to make a cup of coffee, but it's going in the long run, it's going to be way cheaper than going to get coffee every day.
That's like a lifestyle creep type thing. But that's me. The big one, the one that I really, um, the one that I have a huge, um, problem feeling sorry for people is when the aspirations become necessities, things that you consider luxuries.
I can never say that word luxuries before, like eating out or high-end cars or the newest iPhone, et cetera, now feel essential. Like you can't survive without them. Like you have to eat out, you have to have a Schwab, you have to, or a Saab, or you have to have a, an iPhone.
Most people don't know what a Saab is anymore. A Mercedes, a BMW. Okay.
But like when, when, when things that you used to look forward to as treats become like essentials, that is where I just draw the line where I can't feel bad for you anymore because you've reprogrammed your brain to just, but that's a human trait. Like you think about it, like if you go back to like the, the honey in the gathering days, like they have a good crop and then they just expect a good crop every year. And then like there was like a flood or if there was a drought, they didn't have a good crop.
They didn't prepare for the year where they didn't have a good crop. You can't really feel too bad for them because they were stupid. And if you want to actually move into the stoicism thing, one of the concepts in stoicism, since Tim's a super stoicism person, most of them would actually intentionally spend days depriving themselves to keep the perspective of like their normal, which I think is probably something that everybody should do.
Because like one of the, I mean, it's a good thing, but it's also a negative thing where like humans in general just like have the ability to adapt to a new baseline, but that can work against you if like you're not conscious of it being in the luxury side of things. Yeah, generally it does. So that's why putting in those intentional like depravity situations to put things back in perspective, it's like, oh, I really don't need this like super luxury, whatever the heck thing.
And like, we're like the complete opposite where we're like, what can we go without? Let's see what we can do. And then like the luxury is like, I'm not even kidding. Like if you've ever not showered for a week and you've worked your ass off and sweated your ass off and then you took a freaking shower, it feels like seriously the best thing in the freaking world.
Sex is the same thing. If you haven't had sex in freaking forever, the first time you have sex, it feels like mind-blowingly orgasmic. But if you have sex every day, it starts to lose its freaking like edge.
Everything is like that. And I think the luxury stuff kind of ends up in that category where the more you have of it, the less... The one that I think what people think is luxury that I just don't understand is air conditioning. Even if I go like two weeks without air conditioning, I can never turn the air conditioner on.
I'm like, well, that's great. Like it just makes me cold. I could potentially see that being a thing because of health.
If you dig into the health realm, one of the main things, indicators of having health issues is having issues with heat intolerance. And then one of the people I'm talking to right now who has vaccine injuries from the COVID shot, he's extreme issues with temperature regulation. So I'm wondering if the air conditioning thing could be a combination factor, but I hear you.
But one of the things when we were kids, we didn't have an air conditioner. I have memories of laying, sweating my ass off, trying to sleep and it was too hot to even go to bed and the fans just started coming in. Where I'm at currently in New Mexico, for the most part, it's been in the upper 80s, lower 90s.
And the family members all have to have their air conditioner on. It's like, I don't understand why we're wasting money on this when you could just open the windows up or close the blinds or just, I don't know. I've been riding a bike and just go outside every day and deal with the heat so then it doesn't feel hot.
I don't understand the air conditioning. That luxury doesn't compute with me. Yeah.
And the other thing too is that works really well if you have dry heat, but when you're in humidity, I know my aunt living down in Florida, they have to have their air conditioning on to a certain point. Otherwise, mold becomes a problem. So it really does depend where you live.
You can't just say, we're not saying air conditioning in itself is bad. I've had the AC on because it's been in the 90s and we just keep the house set at 78 because the cats are not going to die. Dude, I've been fighting with these people for a week and a week and a half, almost two weeks now.
They turn the air conditioner on, I turn it off. They turn the air conditioner on, I turn it off. I'm like, you guys need to learn how to survive.
I turn it off. You did say that your one cousin actually- Did you touch the thermostat? Yeah, right. But you did say that your one cousin went somewhere and was huffing it all day outside and then they did get acclimated to the warmer temperatures.
And then the air conditioning did feel really cold. So it really, again, it's that your baseline- The same concept. Okay.
So if you want another luxury, I understand it's bottled water. We went through this when we did the budgeting one where people spend hundreds of dollars a year on bottled water when you literally could just buy a filter and have your crappy water filtered through something where it's good water and put it in a container and you have better water than the bottled water ever will be. Yeah.
And you just get a reusable thermostat. I have problems feeling bad for people whenever they make stupid decisions. Going back to the coffee thing, if you make your own coffee, you can make it however you want.
So it's going to be better than Starbucks or Dunkin' or whatever. You're going to make it how you want it. So it's going to be better.
I feel like it goes back to the books that talk about organization and productivity. What happens is there's four quadrants and people will constantly gravitate to urgency factor, which is technically, I guess, the instant gratification thing. And then section two is this stuff that is not urgent, but it basically prevents future urgency from happening.
So if you do that, like that section two, it's across the board in all areas of life where people do not put enough emphasis into that planning and that preemptive thing to prevent those fires from being put out, those instant gratifications, the urgency factors. Because I will say, I was one of those people that would wake up in the morning and I'm like, oh shit, I'm late for work and I got to hustle ass. And then that makes it, I don't have time to make coffee at home, but I have time to stop to get coffee on my way into work.
But if you had a coffee maker at work, you could get paid to make your own coffee. You know what I mean? Like doing that little bit of a preemptive thing. So that's, I think the biggest area that most people have an issue with this stuff.
I just like, I really have a difficult time feeling bad for people that fall into this category where like. I have no empathy either. Like it's, if you're aware that it could be a thing, but you refuse to look into it and figure out how to fix it, I have no sympathy.
But then the third, the third sign of a lifestyle creep is difficulty saving money or contributing to retirement because you have higher discretionary spending, which leaves less room for savings or investments. And that ties right into the other two. Like when, anytime your luxuries become necessities, you're obviously going to have less money because you're spending more on various items that you'd never spent on before.
But again, leaves less room for savings and investments. You should never be leaving that to last. That should be your higher priority and coming out first.
And the one that I brought up before she didn't agree with, but like another sign of lifestyle creep is increased reliance on credit cards or loans overspending can lead to accumulating debt. And then I see that a lot, I actually see it more so with like what I brought up with the vacations where people will actually put like their vacations on credit cards because they can't afford them with their new money because of all the other little death by a thousand cuts they have. So then they put like a trip to Disney world or the Poconos or the Blue Ridge mountains or whatever, and they put it on a credit card.
So then they're spending like six to eight months paying off their vacation that could have done without. Well, it's not necessarily about doing without again, it's the pre-planning thing. And this is, I think because credit cards have essentially taken over the world, people do that thing where they don't want to wait to save up for it.
They put it on a credit card and then they pay the interest off. Well, you're like killing yourself an interest. The reason I think it's the reason I think it's so like, just, it just kills everything is because the most credit cards have like a 29% interest rate.
A lot of them right now are over 29%. Yeah. That's crazy.
If you think about like you put anything on a credit card and it carries over for a month, you're paying so much money more than you would. You just would have paid cash or just not did it. You're doing it to yourself with credit cards and you're stacking the inflation and those tariffs and all that crap.
Plus the credit card interest. Like that's freaking crazy talk. But when we went to Greece with those two people, we had saved up for our trip.
They had put it on credit card because they had just paid off another trip and now they could go on another one. And we were like, that is such an, but we did, but we did it even better. We went to, we went to a CSL and we paid for it with plasma donations.
So we didn't actually, we weren't out any money. Like we basically don't need it, but we still saved up for it. But we still saved up for it.
Same exact thing with my bike where I would just put in a little bit every, every month into a, into a bullet shares. So then when I had enough money for the bike, I could just take the whole payment out. Like you have to learn like the patience thing.
Like I'm not, I'm not suggesting that you deprive yourself of stuff that you really, really want because you really want something. But if you do, you're taking interest and turning it into something that works against you and making it something that actually works for you. So us saving up money for Tim's bike and stuff, we were putting it into a high yield savings account, which we were making interest on and actually compounding that savings rate.
Whereas if you put something on a credit card, you're actually paying more in interest to have that money on the credit card. Like you choose again, the wealthy mindset. I can tell you the bike thing.
If, if we just bought the bike outright without any of the, uh, the suffering that went into like saving money up for like 15 months, I would have liked the bike, but I don't think I would have liked it as much as I do now because I know it took like over a year to pay for it. So now when I'm riding, I'm like, yeah, this is well worth the year I spent. Like, so I prolonged my gratification, but it's, I still have like, but every time I ride the bike, I'm like, it's the same.
I get like the same feeling. I would have had, I just like did the instant gratification, but I just prolonged it. Now it's been two years.
I actually think there is something in psychology where they talk about the people who actually have to work for stuff, have more satisfaction from the things they actually buy. So if you catch yourself in that consumption loop where you don't have your satisfaction is like not happening, maybe you should work harder and not do the credit card route and just test to see the difference in experience of the pleasure of the outcome. Just try it and see if it makes it.
I can tell you when we go out and it does the same thing. When we go out to eat, like say we go, like we are, we're, we're really good for like a month and we don't go out to eat. And then when you go out to eat like two months or twice in the following month, the food tastes better.
Generally, even if it's crappy food, like it's, Oh, this sub is so much better than, than I remember it being because it's been like two or three months as I had a sub or like all this. It's like that complacency or that new normalcy boundary. Like when you have distance from stuff, you actually have a more acute intense experience because of the distance factor.
I think is the easiest one to compare because I haven't had a meal out in six weeks now, but you're also have all that food at your house, at your disposal. Like, I don't even want to talk about it, Mr. I can't get it. I'm like so much.
Like I probably could have been here for three years and not ran out of food. I will tell you, Timothy, since you haven't been home, I've only had to go to the grocery store like once and I haven't had to dump the trash cans like at all. We need to talk when you get back.
Sounds like a me problem. It is a you problem. So, okay.
I'm going to go over a couple of statistics here real quick to like, just to highlight what we have, what we're seeing like with the American consumer. This is from the Bureau of Labor and Federal and the Federal Reserve. I like combined two statistics here, but from 2022 to 2023, the American consumer spending increased across all income levels.
And they mean from like up to 50,000, 50,000 to 100,000 and above 100,000. Those are the three levels they went. But across all levels, it increased by 5.9%. And at the same time, only 54% of adults had three months of emergency savings at the time, at the end of 2023.
So, you're seeing the spending is increasing and the number of people that actually have an emergency fund is actually going down. I believe that number from 2021 to 2022 was up in the 70%, but we have to remember that was after COVID and we were all getting free money. So, I don't know if that's why I didn't include the 2021 statistics because it's kind of like skewed, you know what I'm saying? Because we all got a bunch of free money.
But like, so you can see that across all levels. So, even the poor people went up by 6% and even like quote, rich people were up by 6%. So, they all increased their spending.
So, you can see like the lifestyle creep of now I would be interested to see from 2023 through 2024. I'm hoping the statistics come out soon enough where I can see like, if that number is consistent, that like they'll try to contribute it to inflation, but it's not. It's just that people are spending more money each year and they're actually saving less money.
So, you can see it like, which is, and this is the government statistics. So, like, I don't really put a lot of stock in any government statistics because they kind of like skew the statistics to make us feel better about ourselves. But then I went to LendingTree.
LendingTree had a thing that came out in November of 2023, where they found that 62% of all consumers live paycheck to paycheck. And then they went into the income brackets. 77% of consumers earning less than 50,000 annually live paycheck to paycheck.
67% of those earning between 50 and 100,000 were living paycheck to paycheck. And this one's crazy. 45% of people earning more than 100,000 were living paycheck to paycheck.
So, like, you can see that it's across all, again, all the different income brackets. You see that people are like, there's a large number of Americans living paycheck to paycheck that shouldn't be living paycheck to paycheck, but they just keep, it just keeps creeping. Well, and that should bust that fallacy or that thought that the more, I need more money before I can save.
Like, that's a complete myth. It is all based on your financial system intelligence. I don't know what the word is, like your system, like how good you are with finance determines whether or not you can save, not how much you make.
So then I said, okay, well, what then, what do people feel is like the number they need to live comfortably with their current expenditures? Bankrate had a survey that said one in four, it was 26% U.S. adults, so they would need to make more than $150,000 per year to be financially secure and comfortable, which is nearly twice the typical salary. So you think that's 150,000 per person. So if you're married, it's 300,000.
That's crazy. So the married people think they need to make more than 300,000 per year to feel financially secure. It just says to me that like, so the people, when they sit back and look at the finances, they're actually way overestimating what they need.
Like 300,000 for a couple, that's insane. Well, I will, I'll give them, I'll give them that they probably, again, are misconstruing their, their needs and desires, but it's, they're valid, but they're not actually buying stuff. I wish like the one thing they didn't, they didn't do, I wish they would have done.
And I couldn't find a survey, but I would, would like them to actually have a survey that said, okay, what do you need per year to feel financially secure? And a completely different question. What would you need to be financially comfortable? Cause those are two different, I mean, they seem similar, but they're two different mentalities. Secure is like, you know, your rent, your food, your gas comfortable is like your rent, your food, your gas, plus your discretionary spending.
And they didn't really break it up. I wish they would have that. Those are just some interesting statistics that just show that it's across all swaths of income, like it's not just a poor person thing or a middle class thing. It's a car. It's across all of them that nearly 50% of people earning more than $100,000 are living paycheck to paycheck is insane because then if you again you have to think like in the form of like we're in a society where we're supposed to like mingle co-parent or be like a pair so you would think so like so but I would imagine that number would be probably in the ground 50% again for people like a couple earning over $200,000 and I do I can I can say that like living like living on my own I probably would spend less than living with Carmela but that's just because we feed off each other like like it's just like that's how we are like I don't know if we're like oh well he's being naughty so I'm gonna be naughty but like yeah distance it's been very interesting like we we feed off each other's flaws to like justify us having the same flaw I don't know if that's like a normal relationship thing but I would imagine there's some people out there like us but but it is also that we're not happy but I will I will say that the reason that we do have that creep is because we are not happy in the current situation that we're in but we are making efforts to get the hell out of it so it's not like we're sitting here and we're like oh it's that we're aware of the situation and we are making progress not as fast as we should but like life's hard I can't attest to that like I've been happy like uh other than not having the cats or carm with me I've been happy in New Mexico and I haven't spent any money I spent like 50 bucks like I've spent basically nothing since he's been gone too I haven't spent shit but as soon as I get home I'm pretty sure they're like oh I need some of this and we need that and I'll put my foot in your ass is what's gonna happen okay so I want to actually now go for like some like real world examples of lifestyle creep like for average people average people increased spending on non-essential so upgrading your car where you know where you buy a more expensive car with higher monthly payments after a salary increase if you could drive a Toyota to work prior to your salary increase why do you need a Mercedes why would you want a higher payment like why if you're buying a car outright that's one thing but the payment what status second the second real world example would be dying out frequently and and at more expensive places developing a habit of eating out often rather than cooking at home and choosing higher restaurants is another real world real world example of the the creep creep remember TLC creep that yeah but that one is hard when you're super busy and tired and exhausted and whatnot like we struggle with that one still even too like when we're hustling and stuff but we actually did the math half the time by the time you go like leave go freaking sit down yada yada yada it takes the same amount of time as it would to cook yeah and we don't do there are certain certain instances where i can like say you eat one meal a day and you went to chipotle every day you'd be spending like eight dollars a day that's pretty good but that's not a high-end restaurant yeah that's chipotle uh the third example would be buying new and more um luxurious clothes luxurious clothes clothes frequently purchasing designer clothing or more expensive items even if they're not truly needed uh we've all been guilty of that i remember when i was young like i was wearing um la gear and like oh i needed nikes and nikes were like twice as much la gear so like it's just um i we've all been guilty of it just in one way or another but like if you make a habit of it as soon as you make it as soon as you get a paycheck increase you start buying like nike clothes that's the creep this one here is one that i don't understand maybe you can just explain it to me in upgrading flights to premium seating opting for business or first class when previously content with economy like i don't understand like is that a thing that people do i don't think anybody's actually content with economy i refuse to pay more for the same thing because i hate flying doesn't doesn't make sense to me like you i i guess it might be a thing but i can't see a lot of people dog off i'd rather just use points or crick or miles or something yeah i would actually try to get into something with that whole thing but to us actually driving is the cheaper thing and the more luxurious in my opinion because it gives you the freedom and you have your house with you and all that other stuff but i will say that depending how much you fly that could be a justified expense if you budget for it because i i will say flying fucking sucks so i could see why you'd want to fly first class i've never actually experienced it has and you've told me that it is like it's not worth it you don't think it's worth it it's not worth the like extra money but it's pretty sick that's what i'm saying like you've experienced like the the luxury thing so yeah i mean it's something that i would go out of my way to do like i wouldn't be upset about that i think it'd be more of a pain in the ass to do that if you're upgrading i mean like i don't know i don't fit in with first class so yeah we're not really this next one is like is a huge one that i didn't even think of until i wrote it down i was like oh okay that makes sense adding multiple streaming services gym memberships or other recurring expenses signing up for numerous subscriptions that may not be fully utilized or necessary that's a huge one in today's society where like you could um be like you should be content with like say paramount plus but then you sign up for hulu and you sign up for this and you sign up for you um youtube premium and you sign up for like you know i'm saying like you just have like all these reoccurring expenditures before you know it you go back to the one where we said like the streaming services are a huge pull on people's ability to invest like you're talking hundreds of dollars a month you know what stuff that you don't even i feel like there's an app potentially to help people with this because the companies really do screw you because everybody's trying to get you into these recurring subscriptions hoping you forget about them and most people are too busy and all that stuff if you had an actual like intermediary thing that would like remind you right before a payment was due like hey are you still using this do you want to keep a subscription before it actually renews and if not it should just be like a simple click no and it would unsubscribe you immediately from it well if you're talking that you should look for an app or develop an app where you can actually like anytime you use paramount it like clocks it anytime you use hulu it clocks it anytime you use youtube premium it clocks it and at the end of the month you can be like well i only use paramount for two hours this month why am i paying six dollars or eight dollars for it yeah you could do that too that'd be pretty sick that'd be really cool actually there's anybody who's tech savvy and looking to like make money those would be two actual app ideas that i think a lot of people would get benefit from yeah you'd be helping the world i know that's not something that's up my wheelhouse but anybody else who's into that right there's two big ones that would help people dramatically i know the next one's a huge one that i've actually seen people do and i said wow uh moving to a more expensive neighborhood approach purchasing a larger home committing to higher rent or mortgage payments after an income increase you know like if you if you haven't done it personally you know someone has done it i just don't even look i feel like i'm the only person who wants to downsize because literally just being in the house one it's more to clean two it's just like you're you only spend you spend 90 of your time and 10 of your house and if you're paying per square foot that doesn't even make any sense tim and i have always been like pro the studios like i'm cool with a 250 square foot 400 square foot studio oh yeah dude oh that'd be sick just one room like mop one room up oh my god maybe we're fucked up but then again you have the people that entertain and whatever whatever but go to somebody else's house screw that okay the next one is increased debt using credit cards to fund upgraded spending accumulating credit card debt instead of using the increased income to pay down debt or increased savings that's a huge so we've talked about this i don't understand the red flag glowing red flag that you're suffering from the creep is whenever you you i just don't understand how people do not feel immense amount of pains from interest payments like if i get an interest payment or a lay fee that feels so viscerally wrong to me someone that used to go through it i can tell you that you don't really pay attention to the interest that you're just like oh my payment's this much a month why not is it because you're willfully ignorant so you don't because there's no other exactly it's it's rather than embarrass yourself that you're paying like 200 a month in interest you're just like oh my credit card payment was 225 it's rooted in shame avoidance i got you okay 200 of it was time if you never plug up all the leaks like how do you ever expect to become wealthy or financially independent and again maybe the answer is accepting the fact that you will never be and that's fine but it's like if you have this cognitive dissonance that i want to be this but you're doing all these negative financial habits like those two things do not marry up and that's the whole point of these psychological episodes you have all those little things or not they're bigger expenditures and i don't i mean i i'm sure like a percentage of americans suffer from that but i think the one that everyone does that gets a raise is the impulse purchases and the less mindful spending buying items you don't truly need making frequent impulse purchases without considering the long-term impact and becoming becoming nonchalant about pricing pricing spending without careful consideration of cost assuming the higher income justifies the expense so those kind of like go together there where you're just like you're like oh it doesn't matter that this bottle of wine is 46 dollars like it's i would imagine that's you'd be more susceptible to the death by a thousand cuts because you have that anchor bias or anchoring point that you're making 130 000 a year or whatever it is so you're like oh and then like you don't realize you're actually using that justification to buy a lot more little little-ish things i don't even know if little is right if you're buying 45 50 dollar bottle of wines but i'm just saying like i could see like i could see that one being super prevalent like i know everybody does impulse buys that like the retail retail sector has like a their whole future pegged to people with impulse shopping so like i and it's just it's easy they spend billions of dollars studying people's psychology and knowing exactly how to like get you to give up money for stuff so then the big question that she started when she wanted to start the podcast which was how to avoid it now we're going to get to how you avoid like we went through all this crap difficulty saving we've been over that like okay then never mind she wanted to start with the podcast with how to avoid the creep and i wanted to end up in the podcast with you have all the knowledge of how what it is how it happens how it presents so how do you avoid it sorry i jumped there way too quick the first one is the boringness thing that we've been over so much it's like well i'm always gonna say creating a budget i don't agree with creating a budget but you absolutely need to track your spending for at least two months track your spending to create a budget this helps you see where your money is going and make conscious decisions about your spending the conscious decision part and the tracking like me like i write like i'm still one of those people that write shit down in notebooks i very rarely like type stuff up on on the computer i generally just write stuff down that you're like me it just helps you visualize and comprehend and it sinks into your subconscious and your conscience if you write it down i spent 400 this month on this i personally do like doing it manually like in a spreadsheet because you get to actually categorize your stuff so like you could screw yourself over kind of like how they do with earnings calls and all their their metrics for for companies where you go to the grocery store and you could buy a whole bunch of freaking impulse buy stuff you don't really need and call it groceries yeah you could just go out and spend like seventy dollars on coke and be like i went grocery shopping i'm actually tracking expenses like we have a tim stupid spending section where i'm like i put in like TSS like when he buys abnormal abnormally amount large amounts of bags of chips or like blocks of cheese like those are those are not necessities so like i do actually break stuff out because groceries is one of those ones where like you could skew it several different ways and i'm sure there's other expenses i mean like you basically like again you have to document everything that you spend you can't like and you have to be honest because if you're not honest cherry pick data if you're not honest you're the only one hurting yourself like you are about shame you don't have to share it with anybody but you're the only one hurting yourself if you're not freaking being honest the second one is the one that she probably would start with which is pay yourself first you automate transfers to your savings or investments accounts as soon as you receive your income your income if you could set it up so you don't even see that money coming out that way you're not having that going through that loss bias or that cognitive loss thing that's the best way to do it you just set them up as an automatic thing and to me that would be like the easiest like really this is the easiest way yeah because there's never money left at the end so the only way to fix that is to just take it out in the beginning well i'm not saying you should basically set up a savings account and a portfolio or a brokerage account you could literally just do savings account but whatever like just to start with like the next one is again set financial goals and prioritize them knowing where you're working towards can help you stay motivated to save like so if you have and that doesn't have to be retirement like say you want to go on a trip to greece set that as a goal and then you basically pay yourself first and you siphon off say i don't know 100 bucks a month that goes into your grease fund and after you accumulate enough money to get to fly to greece and do the hotels and everything then you can go to greece but you do i also think if you make saving fun so like you have your goal and then like you make saving fun or the tracking progress fun so like if we would go to greece we would be like okay how are ways that we can either make more money or we can save more money to put it towards these things and then you would look at stuff you'd normally do and be like okay well we normally go here which costs us this amount of money can we do a free option you know for a couple of weeks or every other week to like save extra money so it's just getting creative and playing with like the variables it's anything like me when you like once you start seeing daily progress compounded interest compounding you're like oh this this kicks ass when you start seeing interest work in your favor you get addicted it's hard not to like when i was doing the worthy thing i i put a couple hundred dollars in and blah blah blah blah like it took like six or seven months but once i started seeing every day i was making more than a dollar in interest i was like well now this is fun because i'm making more than a dollar a day right and then you're like how much money can i get in here what about five dollars what about ten dollars what about whatever and it becomes addictive you're like okay well if i get a dollar a day at like uh three thousand five hundred what can i get for like seven thousand i should be getting two dollars a day right and then it just becomes addictive but i have an addictive personality i don't know if a lot of people do but i do like like so like it's navigating my addictions and one of like one of my favorite addictions now is just seeing like the interests go up and my money just keeps compounding it's like that's awesome yeah make your addictions work for you another way to do it like really like like what karm said i think this this is what i would lean to like say like if everything in your life is paid for and you get a 10 percent raise well then you should basically increase your spending or sorry increase your savings rate by 10 like literally just take what you make and put it into your account or your brokerage account because you lived prior to the raise on what you were making so just take that money and just make it disappear into something that's productive and worthwhile be mindful of your spending decisions like we we've do we've nailed this like 36 times like in the last year um ask yourself if you would have purchased something before your income increased and i actually would recommend like if you're doing a big ticket item like say you're buying a tv or you're buying a laptop or whatever i would literally at least wait 24 hours maybe i for me it's almost like for me it's almost a week like after a week but do i really need that computer i've had like this much time to think about it but 24 hours would be the minimum on big purchases like do i really do i really want this do i really need this one of the other things you can do too is like if you want something specific like we're looking into updating our wardrobes with to get away from the synthetic fibers because i've noticed like body odor has gone up because of it and from what i've read from toxicity and stuff i want to move over to more natural fibers well poshmark is a place that tim was getting discounted shoes on and i realized you can actually get merino wool and stuff on there for like fractions of the price you'd be buying new so if one of the ways you can get some of this stuff is to just creative with getting like second hand that's totally an option too people have a stigma with that but i don't know why no shame no shame in my game i go to i go to poshmark i get used shoes i get used used boxers i use a couple times and then they're like yeah this isn't what i wanted and i just want some money back on it it's like literally buying a car that somebody like a year after somebody bought it knew off the lot to drop 75 in value it's like but my but my mentality is that like if i determined that say i want a i don't know a hemp shirt i go on i say okay hemp shirts are like 90 then i'll go on to timu or poshmark like well what can i get like timu is obviously new but it's asian and you're like oh i can get it for 40 and i go into poshmark but i can get it for 12 and poshmark used i get what i want and it's like 80 less then you're keeping stuff out of the landfill so like i like i like the second hand stuff a lot and if you want some high-end luxury label crap go find a rich development that has a freaking like salvation army or community aid and go shopping there because i'm telling you the one but one of the areas and rich areas them rich people like cycle things out with fashion trends and you can get so many high-end like label stuff for dirt cheap just go to the better the developments if that's your that's your point is a tim tim exclusive i didn't see this in any of my research this is tim exclusive okay i have established two funds you're going to establish an emergency fund and you're going to establish a fun fund ideally the emergency fund will cover 6 to 12 months of your bills the fun fund is a way for you to stay financially strong so like basically you again when you're paying yourself you're putting x amount into your emergency fund you're putting x amount into your fun fund you're putting x amount into your travel fund or whatever you can come up with whatever funds you need but that way when say you want to go to an amusement park you just go to your fun fund and be like oh i got 500 here i can totally i can totally swing going to the amusement park and it doesn't impact your savings it doesn't impact your emergency fund it doesn't impact your checking account because you already have a fund set up specifically for fun activities yep and you don't need to put it on credit card and deal with the interest crop if you choose a credit card for points you can do that and then get extra free cash and then just pay it off set it for auto pay that's what we do this and the next one is like one that we've been like kicking back and forth a lot and like we seem we kind of agree on it but like you you do need to identify what a want versus a need is and stick to it now if that doesn't necessarily i don't think a need is like necessities like a need could be like i need bobelo other people would say that's a want but i need bobelo to me that's a satisfying some deeper craving that sim has and it really does become a need and i need potato chips so like that's a need other people would think that's a want you want potato chips no no i need them i like the crunch and i like to have potato chips with my other meal so like i'm not saying just discretionary spending is a want and essential spending is a need that's not what i'm saying like if you do it intentionally so that they don't become compulsive hijack moments that's when you go over and above and beyond so if you intentionally put those like pleasure bombs in there or whatever whatever status bombs whatever the heck your freaking needs are versus she needs like computer shit and camera shit and experiences those are needs those not they're not wants that's like to make her happy and fulfilled she needs those so those become a need versus a lot of sensory and like stimulus a lot a lot a lot but i'm pretty sure if you do all the things i just covered there you can actually get you can do if not eliminate the you can minimize it by a lot well i think i think the other problem that happens is like most people if you okay i think this is actually the biggest thing and it's not discussed so this is my my bullet point most people who are trying to actually save up for retirement and stuff the goal post is so far out it's like 30 plus years out that it's like not real plus then you if you're using that four percent rule and you're using all those other weird strategies that they're using it is so many convoluted variables that you literally do not feel any form of clarity so you're just like either fuck it or i'm so confused and then you actually impulse spend because you're confused or you feel guilty or you shame spiral or like all this other stuff happens so if you use our approach with figuring out what your monthly like needs are your monthly expenses are and then you just work towards building your dividend up slowly at time so start saying i'm going to replace my um my phone bill i'm going to replace this with my dividend income i'm going to replace this and even if you don't start paying it you're like that's your new milestone building if you if you invest in stuff to the point where you're getting 25 a month to cover your phone bill if you're getting 50 a month to cover your gas expenses if you're getting i don't know 120 a month to cover your coffee uh need or whatever habit thing that you absolutely love and will not get rid of like we were even talking about um starlink we're going to have starlink when we get in the van and i think it bumped up to like 165 so we're going to strategically invest in the yield max in the ground hill high yielders to actually have that covered as part of the income of our dividend thing so you're breaking things down in these blocks and these milestones and if you just invest to the point like when tim was talking about getting that dollar a day from worthy but if you do something similar in your investing like portfolio from just those micro things and like if you break your entire like monthly budget down into those little micro steps and you just build up your replacement your supplementation like that to me is so much more like tangible real world like apples to apples as opposed to some fucking crazy million dollar number that's out in the freaking who the hell knows when time frame i think it makes it a lot more like able to hit those goals because you're breaking them down into small micro pieces and like you can you can hit them you can see the results you can get the outcomes really quick saving for a million dollars is like i think the worst psychological thing you can try to focus on because you never make it and then you just feel like something's wrong with you you feel shame you feel guilt you feel whatever the hell and then you're just like well what's the point and then you just impulse spend and you dig a deeper hole like that to me like the whole reason people focus on that doesn't make any sense i don't know why they preach that it's like everything they preach about retirement is psychological warfare for the average person they want you to keep being a worker bee yeah i know i really think it is a conspiracy i really do like it's it's psychological warfare on the average person because it's never about they're setting you up for failure it's never about you it's about what you can do for them yep and then they do all those things you're like oh so-and-so made a million dollars and then you feel like shit because you're trying to keep up with the joneses but i i don't know i don't think that's a good way to approach it i think you're just going to set yourself up for failure if you use that methodology that's why the dividend approach is so amazing and like the high yield things are so amazing like we're living in such an awesome time where we have all these like resources and tools and methodologies at our fingertips and like i said that's the whole reason we're doing the coney experiment if you take those loans out and instead of upgrading your house or your lifestyle or your luxury you invest in something that's going to become a passive income stream you can replace huge chunks of your income without having relatively little like if you think about like i mean i mean i hate to like simplify but if you think about like one of your impulse things that you buy all the time if you just like replace that with a yield max or a round hill you're going to be generating a passive income stream that's more than going to cover that impulse plus some yeah and we just have to prolong the uh the gratification for just long enough to actually like if i if i drank coffee i would totally have say two thousand dollars and a round hill or an end to a yield max that literally like i would could be and then it would be on a card from the brokerage that i would use specifically for my coffee that's coming right out i would literally do if i had a coffee addiction and it was a non-negotiable need for me i would take my next tax return and i would put it into y max and i would literally just use the weekly payouts to buy my coffee oh yeah we did discover that we discussed that a long time ago that's like the biggest the biggest chunk of money that people can put into investing would be their tax refund so that would be the easiest way to do it like you're literally not taking anything away from you you're just like reallocating funds and doing something like that like literally you're literally not taking any money right from you you're not you're creating a passive income stream from a refund yeah it's like it's stupid simple and like our fifteen thousand dollar experiment we bought uh 876 shares of coney or whatever and even though the last payout was the second lowest it's been it was 469 cash payout so it's like using that loan and then that could consider could potentially give you almost a 500 extra a month payout every month i don't know like it's the difference between people who are wealthy and the average person is utilizing the resources and tools at your disposal and getting more creative with like how you implement the variables or how you actually like maneuver in the variable setting that's really all it is and like being in tune with your habits and being educated but that's like where we hope that we're helping because we're like teaching yeah y'all how to do more about your habits like if you can't freaking figure out how to spend a thousand dollars you're not gonna be able to figure out how to spend a hundred thousand dollars or save a hundred if you didn't know about roundhills or real maxes you'd never know that you could make a shit ton of money in them so like that's where we're trying to help with like teaching you there's ways to make a buku bucks that are not risk-free but then no investing is risk-free so like but no savings is risk-free like no savings or investing or anything is there's a risk with all of it but doing nothing is more high risk than doing something yeah it's more of a detriment because doing nothing guarantees the negative results like even if you fuck up multiple times like we have you figure it out but if you don't if you want to avoid the pitfalls that's the whole reason we're putting all this out there because we have screwed up i don't know how many times and we're like showing principle that i like that i basically have exuded my entire life i finally figured out and it basically is if you make a decision don't focus on if this decision was a failure or success focus on the process of making the decision was it sound did you have the right information did you make a sound decision doesn't matter if it worked or not that doesn't matter and if you can take a learning lesson from it like that is honestly the goal if you're not if you don't get the result as long as there's a learning thing and it prevents you from making similar mistakes in future that's still a win that's why stoicism like that we episode on that is because like it's just that is a that is a profound difference in decision making that most people don't ever experience that most people they make a decision they focus on success versus failure and that is not what decision making process is the decision making process is information that you retrieve and you compute and you generate a like a plan of action with the information that you have available that's what makes a good decision it's not whether it succeeds or fails but the people who truly fail are the ones that never actually make a decision or implement anything they just they choose not to and you're guaranteed failure if you do nothing so that is the creep next week's going to be a banger i just finished the email up for it and basically i went through um june 30th i would that would be halfway at the halfway point of the the year uh and i went through and i basically readjusted what the current macro trends are not what they were like in december like what we're where we're currently at macro trend wise and then i went through that and i identified the macro trends and then i identified like um investing strategies for the rest of the year based on those macro trends with tickers and yields and everything so it's gonna be a good one i love macro trend episodes so i'm excited it's gonna be a data dump data dump with a lot of tickers that hopefully help people um navigate to just insanity that we have coming down the pipe yeah so that's a good pivot now that we just did like three psych episodes so we'll pivot back over to investee stuff cool that's next week all righty guys we shall see you next week bye