How To Stop Harmful Lifestyle Inflation

It’s quite often that I stop and think back to what my life was like 1, 2 or even 5 years ago. What was I doing? What were my habits? What were my opinions and views? It turns out that whenever I do this, I always have to have a bit of a laugh at that things I used to do.

I mean we all used to do silly things when we were 15 years old (namely play Elastomania WAY too much in my case) but even thinking about what I used to do one year ago has me shaking my head sometimes now and it’s all due to gentle, consistent lifestyle deflation.

Most people know about Lifestyle Inflation. It’s a bad thing and so they’ll try and maintain their level of living at the same rate regardless of any raises or windfalls. This is a good pattern to get into obviously, but you’re here at MTM for a bit more advanced lessons so once again I’m raising the bar a bit for everyone. You shouldn’t just aim for no Lifestyle Inflation, you should aim for gentle, long term Lifestyle Deflation.

Lifestyle Deflation is something that is best done over the period of years. If you try and change too much, too quickly it’s likely you’ll feel the change as being a sacrifice or “bad” and only do it so long as you have enough willpower. As you may or may not know though, human willpower is a finite thing. It doesn’t matter how strong you are or how well trained or determined… you’ll still give in at some point after some amount of temptation, it’s just a scientific fact of being human. So the best way I’ve found to do it is over the course of many years.

I should also note that in most cases, lifestyle deflation should be done under the context of a challenge or something that will have a benefit other than just saving a few dollars. Saving money is fantastic (feel free to write your tips in the comments) but at the same time it’s often not enough to properly motivate most people. So instead of biking to work being purely about “saving money on petrol”, make it also about getting you more exercise.

Make it about saving you time (as your exercise and work commute are now combined). Make it about a fitness goal you set for yourself and want to achieve. This way the motivation for the task isn’t just “oh, I saved $2.50 today”. It’s about more than money and not only will it help you motivate yourself better, it’ll make it easier to justify the change to your friends and family who quite often judge us into not doing what we may otherwise wish to do.

Lifestyle Deflation, Not Lifestyle Inflation

Step 1: Chose a single deflation point for the year. This might be wanting to eat smaller portions (and thus save on your food bill whilst at the same time likely being healthier for you). You might want to eat meat 2-3 times a week instead of every day. You might want to use your car less. You might want to get rid of Foxtel or you could begin biking/walking/catching public transport to work every day. Either way, choose a specific expense or “thing” in your life that you’d like to change.

Given you’re here at MTM, you’ll most likely want to chose the one that will give you the most monetary savings. Forsooth, the top deflation points that will do this are (in order of greatest savings): Housing, Transportation, Food, Recreation and then “Misc” so I’d suggest focusing on them first.

Step 2: Research easy ways to perform the deflation. The Internet is a BIG place and I can almost 100% guarantee that many others have tried to do what you want to do already… and have a lot of tips and advice for you to boot. It’s tempting to just dive in, cancel that subscription yeah! But often this ends in failure (however some people do prefer to do things this way).

Just make sure that you don’t research the deflation subject for too long and never end up actually taking action. There have been many times when I’ve researched, asked various people for opinions, simulated various scenarios (in Google Spreadsheets of course) and just generally “studied” making a certain change in my life.

A good trigger point to look out for I’ve found is when you’re going around and around in circles. It’s here that you’re quite likely just treading water and are possibly too scared or worried about diving in and making the change. This is when you know you’ve done enough research.

Step 3: Do it. You’ll likely be nervous or have someone (or multiple someone’s) tell you it can’t be done or that your life will be hell if you do it. Ignore them. Do it anyway. 99% of the time you can always go back to the old way of doing things so all you’re risking is your time and energy.

At this point, after you do it (whatever it is), you’ll likely be full of energy and excitement as you delve into the new aspect of your life. You’ll be counting up how much money you’re saving, you’ll be telling everyone else how great it is and that they too should try it. You’ll be reveling in your own Awesomeness and good on you but, there’s one final step.

Step 4: Ensure you maintain the new deflated point for at least 3 months. If you’re someone who really doesn’t like change much or that takes a while to get used to things, make that time even longer. Usually when you deflate your life you are also enacting a new habit. This could be the habit of only eating meat 2-3 times per week as mentioned above.

It could be the habit of biking into work or getting your coffee from the machine at work instead of the cafe. Either way, habits take a decently long time to instil in us. Typically, a simple habit of “drinking more water during each day” can take up to 60 days to embed. More complex or resistive habits (say going to the gym twice a week) can take even longer, up to 3 or more months in fact.

A Recent Example

Our mobile phone bills were until recently, quite high (by my standards at least, why people still pay $100/month on their mobile phones is beyond me, unless you’re a business many that spends 24/7 on the phone that is). Both the DW and I have been all around the carrier world.

Optus had horrific customer support to the tune that I at one point talked to the top manager for the Optus Australian Support Centre and promptly yelled at her (it had been over 8 months’ worth of problems and calls). She fixed my issue within 20 seconds but by that point there was no way I was staying with them.

We’ve been to Vodafone and experienced the almost comedic tragedy that was “Vodafail“. After which we ponied up the extra cash to port to Telstra, we figured hey, we might be paying a bit more… but at least the service is usable now! Their service is very usable and we’ve both enjoyed the coverage and speed of their network for a year or two now. Unfortunately they’re just too damn expensive.

I actually had quite an amusing sales cold call a few weeks ago from Telstra asking “if there was anything they could fix with my service“. I told them it was fine aside from the astronomical prices they charge. The sales lady quickly piped back stating that they now have new plans and that I could sign up to one of them if things were a bit too pricey for me.

As this was around the time of me doing step 2 (research) I knew about the new plans all too well. I was currently on an older $49/month BYO plan from a while ago that gave me $500 worth of calls and 1.5GB of data. The new plans they’d just “brought out” started at $50/month… for $600 worth of calls and 1GB of data (plus a contract of 2 years that wasn’t there before).

I told her about the two plans and then had to repeat myself a second time: “Yes, your new plans are more expensive and have less data included in them than the same plan from a year ago”. Stunning progress Telstra. She was speechless at this point (and a bit confused I think too) and promptly apologised. It was clear that Telstra wasn’t going to cut it if my goal was to deflate the size of our mobile phone bills.

So after some more research I once again found myself spinning my wheels. I’d come across Kogan and wasn’t quite 100% sure. I was stalling. So finally I made the jump to step 3 and ported over. My yearly spend has gone from $588 to $299 and I’m now getting unlimited calls, SMS’s and four times the data, all still on the Telstra network.

It’s exactly the same network (no faster LTE speeds) but that’s OK as I don’t own a LTE phone. The port over was seamless and I’d highly recommend them however YMMV given it’s a mobile service and even Telstra’s coverage can be dodgy in some places.

More Bang For Your Buck

The above is just the most recent example of our consistent lifestyle deflation. It’s been going on for many years now and I can’t recommend it highly enough. More often than not it will leave you looking back in awe at how bad you were 2, 3 or 5 years ago.

When you consistently improve your efficiency year after year it has a compounding effect that, whilst you might not notice much year to year, you will notice looking back over 5 years. You’ll shudder at how much you used to waste on coffee or food in general. You’ll recoil at how you could have possibly paid all that money for a new car knowing what you know now.

More often than not though, lifestyle deflation rams home the fact that you can easily live a comfortable, happy and rich life on far less money than what you’re currently spending… it just take consistent, gentle deflation. Making your morning coffee at work (for free most likely) is not substantially different from paying $4 at the cafe.

Sure, coffee connoisseur might yell out in the comments that their barista is a genius and sipping that black gold they make is easily worth the $4… but ultimately it’s not really much different. It might be for a select few, but most just need to get into a different habit and their life will be none the worse off.

They’ll save $4 or more each day and maybe the next year they can start reducing the amount of coffee they have to one every second day. After a few years they’ll be laughing at everyone else still paying $4 a day for their coffee’s while they sit there happily drinking free water which is far better for you and far cheaper.

For the newer readers... if you’re interested in learning more about being mortgage free in under 10 years, automatically and without cutting back on the things you love... You’ll probably like How To Pay Off Your Mortgage Early, Go From No Idea To Mortgage Free In Under 10 Years.

The benefits include: 1) How to pay off your mortgage faster than 99% of people with one hour a month of work 2) How to get rid of your debt and have the freedom to spend money on the things you love, guilt free 3) Clear outline of how to setup your expenses, mortgage and general finance 4) How offset accounts work and how to get the same result without being gouged by the big banks 5) How to cut through the crap and focus on the things that truly matter when taking down a mortgage 6) How to adjust the strategy so it works for you, even if you have kids, even if you only have one income 7) How to do all of these things and maintain a normal social life (and never be cheap).


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