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Will I just keep spending more and more money forever?

How to cope with both inflation and lifestyle creep.

A small figure holds up a huge collection of oversize belongings. Paige Vickers/Vox
Nicole Dieker is a personal finance expert who's been writing about money for over a decade. Her work has appeared in Bankrate, Lifehacker, Morning Brew, and Dwell. She answers reader questions for Vox's On the Money column.

On the Money is a new monthly advice column written by Nicole Dieker, a personal finance expert who’s been writing about money for over a decade. For Vox’s Money Talks interview column, she’s written stories about couples who run small businesses, navigate different relationships with spending, handle health insurance, and more. If you want advice on spending, saving, or investing — or any of the complicated emotions that may come up as you prepare to make big financial decisions — you can submit your question on this form. Here, we answer two questions asked by Vox readers, which have been edited and condensed.

I’m a single man in my late 20s. Every month, I rent one room of a shared house in a high-cost-of-living city for $1,050, have a $72 commuting-to-work expense (covered by my employer), spend about $60 on games and a gaming PC, $300 on food, $300 on going out (dancing and the like), $200 on travel (averaged out, very spiky) and $250 on other incidentals (health care costs after employer-provided insurance, clothing, presents, and gifts, etc.). That’s about $2,250, and from my perspective, I live an indulgent and sybaritic lifestyle that still allows me to pay my taxes, donate 10 percent of my income, and save aggressively.

I know that some of my peers have to pay off student loans, but for many of them, it seems to be more than that. I’m worried that lifestyle creep, or whatever it is that happens to them, will affect me as well. How can I watch out for it? Where is it most likely to come from?

I don’t know if you will ever become the type of person who spends more than he earns. It looks like you’ve already identified your key financial values — saving aggressively for the future, donating money so other people can have a better future as well — and those are the kinds of behaviors that tend to stick over the course of a lifetime.

That said, I can almost guarantee that you will spend more in the future than you are spending right now.

Why? Because someday you’re going to decide you’re tired of living with a rotating cast of roommates, or you’re going to make the kind of career move that requires you to spend more than $50 per month on clothing, or you’re going to meet the kind of person who becomes an integral part of your life and connects you to all kinds of new family members who all require gifts, travel, food, going out, and so on.

Lifestyle creep happens when we change the way we live — and even if you plan on living like a single 20-something man for the rest of your life, spending your sybaritic, indulgent days gaming and dancing, that’s probably not going to happen.

So start asking yourself where you want to be in five years, and then ask yourself what’s likely to happen to your friends and family during the same time period. Do you have a sibling who is likely to have a child, for example? Bump up your travel and gift budget. Start setting aside cash for your friends’ weddings — because they’re going to happen, and some of them will be destination weddings, and many of them will take place during the same year — and if there’s any possibility that you might end up planning a wedding of your own, ask yourself how much you might want to spend on the celebration.

Next, take a look at where you are in your career and where you might need to move (literally and figuratively) to achieve your five-year career goals. I suspect you value work-life balance as much as you value a balanced budget, so I’m going to let you know something in advance: At a certain point, you’ll probably end up with the kind of work-life balance that is incompatible with a room in a shared house. First because you’ll need the stability that comes with having a space of your own, and second because you may want to use your living space for entertaining family, friends, and colleagues. You’re the kind of person who will probably get into cooking, since it’s a great way to save money, and you could end up being the star of your office’s annual potluck.

If that’s the kind of life you’re likely to have, it might mean setting aside money for a down payment. Furniture. A new HVAC unit, sometime in the next five years. Maybe a car, if you don’t already have one, which means insurance and tires and oil changes and paying to keep the thing clean enough to drive it into the office parking lot without having your employer wonder whether the amount of bird shit on your car suggests that you don’t have your shit together.

That, by the way, is why people spend so much. The amount of money it takes to keep our shit together goes up as we get older — even if you successfully maintain the kind of lifestyle that is built around saving, donating to charity, enjoying the occasional indulgence, and acquiring as few unnecessary possessions as possible.

And yes, it will happen to you.

Get ready.

How are other millennials coping with the cost-of-living crisis?

I’m going to assume that by “millennials,” you mean “people my age.” You probably aren’t the 20-something in the shared house from the previous letter; you’re the 30-something or 40-something who is trying to maintain a home (whether you’re buying or renting) while skipping vacations, spending as little as you can on groceries, and trying to figure out if there’s an even cheaper phone plan out there somewhere.

The 20-something who wrote the first letter might not yet understand what it’s like to be financially responsible for sewer backups and school lunches and making sure you’re dressed for the job you want, even if you only wear the top half of your outfit during Zoom calls. Twenty-somethings, even the ones who save aggressively and donate 10 percent of their income to charity, haven’t been budgeting long enough to notice that we’re all spending a lot more than we used to — and getting a lot less.

On the one hand, that lack of comparative knowledge could be a plus. Imagine if you never did any of your own shopping until you became an adult, and then you went to the grocery store for the first time and a dozen eggs cost $3.50. “This must be what eggs cost,” you’d think. Then you’d figure out how to include eggs in your budget.

That is, unfortunately, the same advice I have for you and for all millennials. The way we cope with the cost-of-living crisis is by looking it in the face and accepting it as reality.

This is what things cost right now.

If you are in a situation where things — eggs, houses, Zoom-appropriate workwear — cost more than you can afford to pay, here are your options:

Earn more. Easier said than done, but very worth doing.

Spend less. A little easier to do (since there’s always at least one subscription service to cut), but saving $10 or $20 or even $100 every month probably won’t solve the bigger problem.

Move to a lower-cost-of-living area. That’s what I did back in 2017, and I moved to an even lower-cost-of-living area in 2020. Bought a house at 2 percent interest; bought a car with cash. (I know this won’t work for everybody, especially if your family or your career ties you to a specific part of the country, but at least one of the millennials reading this column should seriously consider it.)

Practice aggressive debt management. Accept that you’re going to go into consumer debt. Build a sterling credit score (on-time payments will get you most of the way there). Get very good at shuffling your balances between 0 percent intro APR cards. If you can snag a personal loan at 6 percent interest, use it to pay off your cards in full. Rinse, lather, never miss a payment.

Share the cost of living with others. Multigenerational housing is a thing! So are roommates, carpools, and community gardens. Even simple day-to-day activities like trading child care or casseroles or Zoom-appropriate workwear with a friend or neighbor can help mitigate some of the rising costs of living.

Start preparing for where you want to be in five years. Hey, it’s the same advice I gave the first letter-writer! Figure out where you might want to go in your career, especially if you can position yourself toward a higher-paying job, and figure out what you need to do to get there. Ask yourself what milestones your loved ones are likely to experience, and start setting aside the money you’ll need to cover them. Cut another subscription. Get off social media. Invest in what matters, and try to choose the kinds of investments — family, career, community — that offer the biggest returns.

And remember: If eggs get too expensive, you can always substitute unsweetened applesauce.

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