Hardwired for Lifestyle Inflation and How to Beat it!

We are hardwired for lifestyle inflation. I’m no scientist but I believe it’s in our DNA. For centuries it helped us survive. It’s easy to blame marketing, comparison and peer pressure, which are factors. But it’s something more. No marketing needed. No Jones’es comparison needed. With almost no prior marketing, peer pressure or deep knowledge of a subject, we can spot which one is better when two things are side by side.

Which apple looks better?

If you had to live in one of these sheds, which looks safer?

 

This is naturally wired into us. We can spot which things look healthier, better built, and so on. We need no apple marketing, no deep knowledge of agriculture. For the sheds, we don’t need ads to persuade us or marketing to lie to us. We don’t need a background in building or construction. We just know. We can see it. My 5 year old knows.

But here in lies the problem. If you know which one is better…..

Why would you pick the lesser option?

That has almost never been a smart way to think. Healthy cow or sick cow? Pick the healthy one. Sturdy wagon or busted down one? Pick the sturdy one. You’re not going to make it on the Oregon Trail otherwise. Fresh bread from the market or moldy bread? Pick the fresh bread!

This ingrained instinct has served us very well, for a long time. And it’s still important in a lot of our choices.

But something has changed.

100 years ago in Montana, you went into the local mercantile to buy a new pair of paints and there were three options at rather close price points. You picked the best option for you and no harm done.

How many options do we have now for pants? How many price points are there?

Thousands.

From my Montana home, I can go online and find a pair of pants for $10, $100 or $1000 and have it delivered by next week. My brain can still see there is a difference between the $10 pair and $100 pair. (The $1000 might be subjective). I’m not a fashion insider, but I can easily spot how the $100 pair is nicer than the $10 pair. I don’t even need to see them in person.

Why would you pick the lesser option?

Picking the lesser option up until this point in our collective history has NEVER been a good idea. Buy the fresh bread, sturdy house and healthy cow!

So why would you pick the lesser option?

If you don’t learn to override this natural and historically helpful discernment, you will ALWAYS inflate your lifestyle.

No matter how much money we earn, we can inflate and inflate and inflate our lifestyle. There are more than three pairs of pants at the Mercantile! There are almost endless options in thousands of areas of our life. Endless ways to upgrade.

Why ride a horse across the country, when you can drive? Why drive a beater when you can drive a comfortable car? Why drive for 40 hours when you can fly in 8? Why fly in a cramped seat when you can fly first class and stretch your legs? Why fly commercial when you can rent a private jet? Or a nicer jet? Or own your own jet and hire your own personal pilot?

There is always a better and more expensive option available to us now.

Always.

So when you show up at the car dealership and you have $20,000 cash in your pocket, why will you buy the ugly, high miles, uncomfortable $5000 car? It’s not as nice. It’s not as comfortable. You don’t need marketing, peer pressure or a salesman to explain that to you. Your own eyes can see it plain as day.

So why buy the ugly, uncomfortable, high miles car?

WHY?

That’s the key friends. You better make damn sure you know your “why”!

If your “why” isn’t crystal clear, compelling, and deeply grounded: you’ll upgrade. Every time. Why drive a crappy car when you can drive a nice car? You better have a good reason.

And “afford” has become a slippery word in the last 50 years. This is another enormous change in our culture. Afford could be qualifying for a car loan. Afford is making the payments on a 30-year mortgage. Afford might be the limit on your credit cards. Afford is how much the government will loan you to go to college.

It’s great that we have those options available to us. But it makes those upgrades SO much easier. With a 30 year mortgage, the difference between a $250k house and a $265k house hardly feels like $15,000. And we can easily see with our very own eyes that the $265k house IS, in fact, a little nicer. Why choose the uglier house? To save 20 bucks a month? (Because we think of it in monthly payments, not actual dollars.)

I shared how we paid off $50,000 in debt then saved that first $100k. I shared why saving that first $100k was so freaking hard. But this is part 3. And this is for all of us. For our entire life.

We have to learn when and how to override our default setting of choosing the nicer option. Because there is always a nicer option out there. When I shared my personal highlight reel, I said: “I won’t trade the things MOST important to me for a slightly upgraded life.”

So I bought the ugly house, and drive the beater car, and had roommates, and travel in a pop-up camper. Because my most important is crystal clear. And if the lesser option isn’t my most important, I’ll look at the nicer thing, with pockets fulls of cash and say, “Actually, I’ll take that ugly one over there.”

The more clarity you have, the better. Go through my mentoring questions. Print off my “Let’s Chat” sheets and take them along on a walk with someone you care about.

You’re going to face 1000’s of purchasing decisions. You better know when to choose the lesser option. The more clear your “why” is, the better shot you have at creating more financial freedom

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29 thoughts on “Hardwired for Lifestyle Inflation and How to Beat it!

  1. Such a great message Jillian! We were directionless and spending like it before we sat down and questioned our values a little over three years ago. Fortunately, we didn’t lose sight of our desire for financial security and love of DIY so we still bought the reasonable house and cars. We were living to emulate the life of our families growing up, and we had already matched our parents salaries with our first jobs, so it didn’t bring any extreme debt.
    Once we found our “why” we eliminated so much of our spending and started enjoying life a lot more.

    • The more clarity the better! Your right, it makes spending, budgets and savings goals SO much easier. And people start enjoying life more because money, time and energy are going towards high leverage items (things that closely align with our values, passion and purpose) instead of low leverage items. =)

    • Liking nicer things is a really useful and important skill to survive….until it’s not as helpful.

      We have an apple tree in our backyard. In the fall the apples drop and if they lie on the ground to long they get really nasty. With no prior knowledge of fruit marketing, or apple education my 5 year old knows this. So much so, she won’t even touch them! Which is super helpful. I don’t want her eating rotten apples. But it becomes less helpful when we are trying to pick between $1 a pound apples and $4 a pound apples. =)

    • It’s one of the elements that is still really important, which makes it harder to fight against. If a kid (or adult for that matter) can’t tell the difference between those apples or sheds, I’m not sure they are going to live very long. It’s super critical for our survival to be able to quickly and easily see the difference between two things without much education or marketing. Knowing when it’s helpful and when it’s actually harmful to living an on point life is the challenge.

  2. You’re absolutely right. Choosing less than the best is necessary for saving. But why save? If you don’t have that goal you’re saving for you may as well just buy the nice thing. It’s when you are choosing between the nice car or an extra year of work (or other alternative) that the decision becomes crystal clear.

    • So here is the funny thing. Even if we don’t realize it, we are always choosing between two things. We might not know what the other option is or see it, but it’s there. Either a nicer car or extra vacation. Either a second home or pay for our grandkids grad school. We can fritter money away on the nicer thing now (if it’s an upgrade but not core to our passion/values/purpose) only to be disappointed we no longer have the resources when the second option (that does line up) appears. There is a house near me for sale for 80 million dollars. 80 MILLION. If someone buys that one, they might not be able to buy the other 100 million house in New York. Montana or New York but you might not be able to buy both. =)

  3. I try to think in terms of utility. I’m perfectly happy with my $25 jeans that might last me 2-3 years (maybe longer now that I’m not wearing out the knees scooping litter 5 times a day). And if I bought the $100 pair (let alone the $1,000 pair) I’d probably never wear them, fearing I’d spill ketchup or something on them. So that would be a total waste. Same goes for our ugly old high-mile car. It gets us where we want to go with fewer worries about scratches, theft, and so on — and cheaper insurance.

    • It’s funny how we are more nervous to use nice things. It’s been a weird thing for me to learn with our journey with minimalism. If I buy something, I have to use it….a lot. If it’s too fancy to use, you’re right, it’s not really useful!

  4. Yep! I’ve been noticing lately that my 7 month old son thinks that the toy that is just out of reach or the one that I’m playing with is the one that he really needs to have! I didn’t realize exactly how early that started.

    • That’s funny. It’s really important that kids have this skill. One of my girls had Pica and would eat non-food items. It was SO stressful. It took about 2 years to really teach her not to eat non-food items. :/ Trying to teach things that should come naturally is super frustrating.

  5. Sometimes those images are important. I have my WHY, but sometimes my HOW has had to change because penny-wise quickly turned into pound foolish!

    My first step toward F.I.R.E. included selling my wastebucket of an SUV and buying the ugly car. It turned out to be a lemon. After thousands in repairs and no end in sight (got a trusted opinion on how much more the car still needed), I sucked up the loss and bought the shinier car.

    Our second major step toward F.I.R.E., included “downgrading” to the tiny house that (like yours) was full of mold (mold was hidden and not caught in the inspection). I was sick and on antibiotics for 1.5 years. $25k later, the house is now mold free and renovated. We hadn’t planned on the reno, but the house needed almost a full gutting. We still ended up well in the black, and I wouldn’t change the move, but my body still hasn’t recovered from that beating.

    Have you ever had this situation where you chose the “prudent” move that quickly ended up turning into the much costlier option, or came with a hidden non-financial cost?

    • That is why this is such a tricky thing. We can tell the difference between good and bad things for a super important reason: to keep us safe and healthy and avoid risk. And we REALLY need that skill. So sometimes it’s super helpful. Our brain can tell across the board which is better, but then we need to figure out what times we should go along and what times we need to choose the lesser option. And your right, sometimes we guess wrong. The car is lemon, the house does cause chronic illness, ect. I wish I had an easy button. =/ But I think we can start with the low hanging fruit. Opting for a smaller, better sized house was probably a good move, it just stinks that the mold wasn’t caught in the inspection. I’m glad it kind of worked out.

      And to answer your question: I guess wrong a LOT. =)

  6. Great post…. I’ve heard it called “the tyranny of choice”. I can stand in the grocery store bar-b-que sauce aisle just staring. There’s ONLY about 60 different brands and 327 flavors and varieties between them. It stresses me out, and to your point, it leads to inflation behavior. I liked liked it more when we had Heinz or the store brand. I would choose the store brand, that’s how I got to FI 🙂

    • I think it’s a combination of tyranny of choice and the fact that we are wired to be able to tell which is nicer. It’s an important instinct to have. If a person honestly couldn’t tell the difference between a good apple and rotten one, they aren’t going to survive the constant food poisoning. But we do have so many choices now! Plus we can’t simply choose the lesser option every time. Or we will die of food poisoning at some point.

  7. “You better make damn sure you know your “why”!”

    This! With all the choices out there and the accessibility we have through technology it be too easy to get caught up in buying the biggest and best instead of considering what you actually need.

    • There are endless choices, and it’s often a good idea to go with the nicer option. But not always… So having that clear
      “why” can really help people figure it out. Thanks for stopping by Sarah!

  8. Absolutely, the word “afford” means so many different things. It’s all relative to income, expenses, and goals…and as you said, knowing your why is key to making the best decisions. I didn’t have very clear reasons for saving when I first started working, so I didn’t save as much as I could have. Clarifying the why helped me and my husband get on a track that more fits us, goal-wise. Lifestyle inflation can still be tempting, but we’re much more prepared to say no if an expense doesn’t align with our major goals.

    • I think having those dreaming/planning conversations is one of the most powerful things people can do! The more clarity we have the easier the progress is.