I’ve always considered myself frugal. As far back as I can remember, I would think twice before parting with any of my money. My parents can attest to my unwillingness to spend money from a young age. My husband has the fun job of trying to convince me that it’s okay to spend money once in a while. And my own children can vouch for the fact that I am “price conscious.”

However, there was a point when I felt like money was leaving the bank account much faster than I liked. I kept wondering how and why this was happening. We were (I thought) just a typical, young family, with a mortgage, student loans, a car payment, and a couple of kids. Where, exactly, was all of our money going??


Everyone knows the concept of the latte factor, right? Small purchases can add up over time. So instead buying $5 lattes every day, save that money instead, and your wallet will thank you.

I considered myself an expert in avoiding the latte factor, mostly by not frequenting the local coffee shop.

What I didn’t realize was the huge impact of the “live like an adult” factor. Specifically, a married adult with children. Because in case you haven’t noticed, being an adult means that you’re spending a lot more money on non-latte purchases.

This hit hard when we purchased our first home and started a family. Within just a couple of years, our spending had gone up significantly. How did this happen so quickly? Were there other young families that felt this way? I had no idea, because no one else was talking about this.


To make sense of the numbers, I made a simple table that included our monthly income and monthly expenses. It didn’t take long before I started noticing a trend.

Here were all of the categories where spending went up. Not surprisingly, it’s pretty much every single spending category you can think of:

1. Housing: We moved from renting a 1 bedroom apartment to owning a single family home. I talk about the extra costs that go into home ownership here– it’s definitely more than the monthly mortgage.

2. Auto: We had one car to our name since we had gotten married, and that was my little Honda from vet school. When we moved, we finally purchased a second car. And yes, we took out a car loan.

3. Student Loans: A DVM/MD household meant that we had both come into the marriage with a lot of student loans. Mine was the lion’s share, at about $120,000. We decided to pay these off more quickly, so that meant a higher monthly payment.

4. Insurance: A higher income and a bigger house means you need to buy more insurance. Yes, we had a whole life insurance policy (not ideal, as I learned later on). Being a single income household meant that an individual disability policy was a must (if you’re in a dual income family, it’s still recommended). Don’t forget auto insurance to cover that new car.

5. Kids: We started a college savings account as soon as each child was born. Factor in preschool costs and extracurricular activities once they were older, and it started to add up.

6. Vacations: We have flown numerous times over the years in order to spend time with extended family, since none of them live within easy driving distance. As we all know, vacations and travel can take a big bite out of anyone’s budget.

7. Food: What can I say- everyone in my family likes to eat. I think we’ve surprised a fair share of restaurant servers with the amount of food we order and consume. The problem was the restaurant bill- I had no idea that this could add up so quickly.

Welcome to lifestyle inflation. Where you magically start spending more money because there’s more money in your bank account.

In all honesty, this had started even when I was single and a new graduate. I was renting at the time. I had a paid off car. And I had six figure loans, but my strategy was to treat my student loans like a mortgage.

What did I do with the rest of my money? I HAVE NO IDEA.

Since I don’t have any records from back then, my best guess is that I spent money dating my now-husband (including travel) and wedding expenses. I never racked up credit card debt or felt like I was living paycheck to paycheck, so I was saving some money, too.

Looking back, I am slightly amused (and very disappointed) that I was so clueless. As a 20-something, there was the sense that time is abundant. This meant that there was no sense of urgency about what I needed to be doing with my time OR my money.


So here are some things I learned about what people do, even frugal people like myself, when you have more money in the bank.

1.They upgrade their needs Housing and transportation are considered needs. However, did we NEED a bigger house or a nicer car? No, of course not. But it’s hard to ignore the temptation to upgrade your life if you actually have the means to afford it.

The three biggest expenses for most people are housing, transportation, and food. Upgrading any or all of these categories makes an enormous impact on your budget.

Deciding NOT to upgrade one of these categories can be the equivalent of thousands of lattes.

2. They spend more on wants We’re tired and stressed, so we feel a need to reward ourselves. At the same time, we’ve all been conditioned to think that buying more things will make us happier.

You can see how this can turn into a vicious cycle when the things we buy boost our happiness level temporarily. We think we’re rewarding ourselves, but it’s a short term reward that can never be fulfilled because there is no end to the number of things we can buy.

But it doesn’t have to be all mindless, consumption spending. It can even be categories like charitable giving or being more monetarily generous with family and friends. When the amount you’re giving doesn’t really fit in your budget, it’s doing more harm than good, regardless of the intention.

3. They spend to save time and for added convenience Money may not buy happiness, but it can sure buy some time and convenience.

A perfect example is a house cleaning service. Not only is this a chore that a lot of people aren’t so thrilled about, but it also requires that you set aside a large chunk of time for that activity. Even for those that don’t mind cleaning, the time factor alone may be enough reason to outsource this job to someone else.

If you had the money to pay for a service, would you not go ahead and spend the money for both time and convenience? This is one service that I decided to gift myself, and I have not regretted it.

MORE SPENDING ISN’T JUST FROM MORE INCOME Spending from your bank account isn’t the half of it. Judging from this country’s consumer debt at nearly $4 trillion, people are very good at spending borrowed money, too.

When you combine a higher income with more available credit, such as higher credit limits on credit cards, bigger mortgages, and the ability to purchase a more expensive car, then you can see how this can all spiral out of control very quickly.

Your higher income just gave you the ticket to more debt. And if you don’t know how to leverage this properly, you’re going to be the type of person that will be working to pay off debt forever rather than the person that is working to build wealth.

This is why I’m a firm believer that no matter your income, you will always find ways to spend up to, or beyond your income. We’ve seen plenty of celebrity stories and lottery winners who have proven this point.


One bright spot when I was going through our finances was that we were prioritizing savings and debt repayment. When you’re feeling the pinch financially because you’re saving and paying off debt, then at least you’re feeling the pinch for all the right reasons.

These are wealth building behaviors that cannot be ignored. Had we not started these habits early in our marriage, it is certain that we would not reach financial independence as early as we would like.


I have to say, I am constantly amazed at how expensive life can be if you’re not paying attention. Now that I’ve had a taste of what it’s like to spend money as an adult with family responsibilities, I can say with authority that lifestyle inflation is real.

No matter if you’re frugal or not, don’t underestimate the power of human nature to spend money if it’s available to us.

I learned, even as a frugal person, that it can happen to me, too. Make sure you’re using money as a tool to enrich your life, not as a way to get deeper into debt and buy you short term happiness. In order to do this, you MUST be vigilant and watchful.

Take care of that money that you’re working so hard to earn. You owe it to yourself!

What have been your experiences with lifestyle inflation? Comment below!


  1. Steveark on February 7, 2019 at 1:30 pm

    Interesting, the part that tripped me up was a vet and a doc with student loan debt taking out a car loan? Surely that was a zero percent loan on a used car? Nobody in debt needs a brand new car. Actually nobody in the world needs a brand new car but once your net worth is over a million it isn’t a huge extravagance.

    • Financial Wellness DVM on February 8, 2019 at 2:05 pm

      I don’t think there’s anything unusual about people with student loan debt taking out a car loan. Is it financially smart? No. But as I came to realize later on in life, it’s very easy to slip into societal norms without hardly a second thought because it all seems, well….normal. It would be so much easier to be financially savvy if society encouraged that sort of behavior, but obviously, it doesn’t. If anything, it pushes you to go in the opposite direction.

      The difference between a brand new and a used car needs to be taken in context with how you’re spending the rest of your money. You could very easily buy a used car, but buy too big of a house and become house poor. There’s all sorts of ways to make less than optimal money choices.

  2. xrayvsn on February 7, 2019 at 8:40 pm

    I think it is natural to want to reward yourself especially after delayed gratification to achieve an advanced degree.

    The unfortunate thing is you quickly adapt and the hedonic treadmill begins. Of all the things I spent money on the ones I don’t regret are on food and experiences. The materialistic things fade away quickly.

    The caveat is you can’t deny yourself completely otherwise you may be saving for a time which you may not get to. Life is not guaranteed. So the best is to compromise and enjoy a little now and a little later

    • Financial Wellness DVM on February 8, 2019 at 2:17 pm

      YES- so much delayed gratification in medicine. And yes to the hedonic treadmill….I was honestly shocked at how quickly one can spend up to their income. Like I said in the post, at least we were intentional about saving and paying off debt from the very beginning….otherwise, we would have missed out on a lot of wealth building.

      I think everyone strives for that balance- saving is a wonderful gift to our future selves, but we all need to live a little and enjoy the life we have now. Otherwise, you can definitely burn out from being TOO diligent with your finances!

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