Living Below My Means

I hear stories about people with ambitions of starting a company who first work at a big tech company with a high salary. On top of an exorbirant base salary these companies incentivize you to stay with a salary increase, yearly performance bonus, and vesting stock options. With compensation that large it’s easy to make purchases such as using an Uber instead of walking, buying meals instead of making your own, or renting out a one bedroom apartment in the nice part of town.

Lifestyle creep is a term used to describe a tendency to match your spending with your income. While there’s nothing wrong with this lifestyle, it makes it difficult to take risk. If you want to start something of your own, that means potentially not making a salary or taking a significant pay cut.

This year I got paid more than I’ve ever gotten paid before and I found myself making many “quality of life” purchases like a new M1 Macbook Air, a monitor, and a keyboard. I use these items daily and they’ve greatly increased my quality of life. But I found I can make the same argument for anything. How about I buy some airpods? How about I buy some nicer clothes? How about I live in Vancouver instead of living at home this Fall? Every purchase elevates my quality of life and thus lifestyle creep ensues.

At least for my ambitions, I prefer to live below my means instead. I want to make things, I want to take risks, and I don’t want money stopping me from working on what I want to work on.

Lifestyle creep is an easy trap to fall into unless I make an intentional decision not to inflate my lifestyle with my earnings. Budgeting helps me stay intentional on how I spend my money. Living below my means doesn’t mean being cheap or cutting costs anywhere and everywhere. But rather being intentional, setting budgets, and choosing a few areas where I can splurge guilt free. Most of the things I enjoy most anyways are free.