Lifestyle Inflation Part 2: Key Drivers

After looking at how my spending has changed over the past four years, I found that I had succumbed to the dreaded lifestyle inflation monster. I learned that two categories were especially troublesome for me: food/drink and “other,” a mashup category that I use to track all of my irregular spending. Today, I’ll look deeper into those two categories to see what is really driving the lifestyle inflation and if there is anything I can do to curb it.

Food spending – groceries and restaurants

Within my food category, I track spending on both groceries and restaurants. The graph below shows how those two categories have tracked from FY 2012 – 2015 (aka July 2011 – June 2015).

As you can see, grocery spending has been pretty consistent over the past three years. During FY 2012, I was living in an apartment and spent most weekends at my parents’ house. When I was at home, my parents paid for food. When I was at my apartment, I didn’t do much cooking, and my basic meals were yogurt and frozen pizza. Not very healthy, but apparently very cheap. And probably not an accurate starting point.

Looking at FY 2013 – 2014, you can see more consistent grocery spending.  The weekly amount that this grocery spending works out to seems reasonable to me, and I’m happy with this number. There was a small spike in FY 2015, which I think is due to BF moving in with me. We share groceries 50/50, and I’ve been buying more proteins and cooking more elaborate meals since BF moved in. I’d like to try to even out this spike a bit this year and get back to FY 2013 – 2014 spending levels.

The real problem here is restaurant spending. It has increased by almost 130% since FY 2012. That is bad news. Again, the FY 2012 number is a bit depressed due to my spending so much time with my parents, who paid when we ate out, but still. Even looking at the change from FY 2013 to 2015, there was a 70% increase.

Restaurant spending needs to come down this year. Now that BF and I have been living together for a while and have a more established routine, I think this will be possible. I would like to get spending in line with the FY 2013 – 2014 numbers.

Other spending – key drivers

As I mentioned in my post about how I budget, I lump all non-regular spending into a single “other” category to give me some flexibility in terms of where I spend my money each month. This category has unfortunately increased by 64% over the last four years, and the graph below illustrates what the change has looked like.

As you can see, most categories are staying relatively consistent. A few, like gas, have already been reigned in. There are also a few, such as school and home repair supplies, that will naturally decrease this year (I graduated so will no longer incur school expenses, and moving/redecorating expenses from when BF moved in are all paid).

Of course, there are also a few problem categories. Weirdly, my cash spending has gone up quite a lot. I have no idea why this is, but I don’t like it. I mentioned in my budget post that I don’t track cash spending because it typically constitutes a very small part of my budget. I am going to try to bring this back to FY 2013 – 2014 levels and if I can’t, I’ll have to start tracking cash spending.

Clothing is also a big growth area. This doesn’t surprise me; I know I’ve indulged in clothing a bit more than I should have over the past few years. With a 75% increase, it is time to cut back. I have more than enough clothing already in my closet. At the very least, I would like to cut this back to FY 2012 levels, if not shoot for something more extreme. I’ve been contemplating a 30-day shopping ban, so perhaps that is just the re-set I need.

I have started going to the gym in the last two years, so there is a substantial increase in that category. I still spend a relatively modest amount on my gym membership, and the large percentage increase is primarily due to the fact that I spent almost nothing on exercise before. My health is worth it to me, so despite this category increasing I think the spending is here to stay. I would like to look for somewhere else to cut back, as a tradeoff to this increase.

My gift spending has also increased substantially (166%! Oof!). I think this is due to two key factors: 1) I’ve become more generous with my money as I feel like I have more, and am therefore buying more expensive gifts, and 2) I’ve added a big gift recipient – BF. My gifting list is pretty short, so adding just one person (albeit a person who I buy pretty substantial gifts for) has made a big impact. While I love my family and friends dearly and plan to continue to give them gifts, perhaps I should adjust my spending in this category and find ways to show more love with less money. I’d like to get this category back to FY 2013 levels if possible.

Finally, we have the biggest culprit in terms of dollar value – travel. During FY 2012, I spent no money on travel. I suspect that this was because I travelled only with my parents, who footed the bill. In FY 2013, 2014 and 2015, I’ve spent a pretty penny on travel. But unlike my other spending categories that have increased, I don’t really plan to change my travel spending too drastically. Travel is one of my top priorities, and spending money on travel brings me great joy. While I’ll try to cut back a bit this year, I expect that this category will hold relatively steady.

Have you looked at what is driving your lifestyle inflation? Are you going to make any changes to curb lifestyle inflation?

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