WATCH ON YOUTUBE

TYLER KLUGE
CFP®, ChFEB℠, CPWA®, CDFA®, CEPS
Senior Financial
Planner

TESSA HALL

Media and Communications
Specialist

About This Episode

Earning more money can create more opportunities to save and invest, but it can also make it easier to spend more of your income.

In this episode of Healthy, Wealthy & Wise, Tessa Hall speaks with BWFA Senior Financial Planner Tyler Kluge about how lifestyle creep can affect long-term financial goals. They discuss why visible signs of success do not necessarily reflect wealth, how promotions and higher incomes can establish new spending habits, and why financial decisions should be considered within the context of your broader goals.

Tyler also explains how recognizing tradeoffs, evaluating recurring expenses, and becoming more intentional about purchases can help keep lifestyle choices from quietly competing with long-term savings.

Learn how BWFA can help you build a financial plan that keeps you on track without constant attention. Explore our Financial Planning services or schedule a complimentary consultation to discuss your goals.

What is lifestyle creep?

Lifestyle creep occurs when spending gradually increases as income rises, making a higher standard of living feel normal over time. Tyler explains that someone receiving a major promotion may be saving more dollars than ever before, yet increasing spending so dramatically that the additional income does not translate into a proportional increase in wealth.

Does earning more money automatically help you build more wealth?

No. A higher income creates greater financial capacity, but the outcome depends on how that income is used. Tyler notes that savings percentages should be considered within the context of income, spending, existing assets, time until retirement, and other individual circumstances rather than relying solely on a generic rule of thumb.

How can lifestyle choices affect your financial goals?

Lifestyle choices create tradeoffs because financial resources are finite. Spending more on a home, cars, private school, travel, or other priorities is not inherently wrong, but those decisions can leave less available for goals such as retirement. Tyler recommends evaluating what matters most and determining whether current spending supports those priorities.

When can a luxury purchase become part of your normal spending?

Some purchases can establish a new baseline for future spending. Tyler uses upgrading a vehicle as an example: once someone becomes accustomed to a more expensive vehicle, a less expensive option may seem less appealing. Recurring subscriptions can create a similar effect by turning individually small expenses into ongoing commitments that add up over time.

How can you make more intentional spending decisions?

Start by asking why you want the purchase and whether it provides meaningful value for you or your family. Tyler suggests distinguishing between genuine needs and wants, while Tessa discusses creating a waiting period before buying something. Taking time before purchasing can help determine whether something supports your priorities or is simply an impulse.