Some folks believe earning a higher income is a valid excuse to submit to lifestyle inflation. But I don’t think lifestyle should necessarily be tied to active income because job security is a fickle pickle. However with a strong framework of growing passive income, a little lifestyle inflation is not only acceptable, but I would even recommend it because YOLO. 😀 Due to the recent tailwinds of increasing investment gains and asset prices it appears I’m ahead of schedule by 1 year to reach financial freedom by my 35th birthday. Since my ultimate goal is to live a balanced, resourceful, and meaningful life, I have decided to succumb to lifestyle inflation and increase my expenses.
Changes to my budget:
|Item||Old Monthly Budget||New Monthly Budget|
|Internet + Phone + Entertainment||$75||$100|
Overall I’m now spending $100 per month more than I was back in 2010. This is not a major change to the way I spend money, but it allows me to enjoy the present a little bit more while not sacrificing too much of my financial security in retirement. The way I conduct my budget is I set an expected target, such as my $150/month for groceries. The target is more of a guideline than a strict limitation. Sometimes I spend less, other times I spend more depending on what I buy and how often I eat out.
Here are my thoughts behind the 3 categories.
- Grocery: Since food inflation has been higher than the average consumer price index over the years I’ve decided to increase my grocery bill to $150 per month. Some people might think $150 is not enough, but it all depends on where you shop. A few years ago I blogged about buying some staple foods from Safeway for about $17. That’s enough produce to last me for probably 1 or 2 days. Then I walked half a block down the street to another grocery store and purchased the same food for literally 1/3 of the cost. I’ve uploaded pictures with receipts for proof.
Since it’s been 3 years since writing that article, I think the same basket of goods would probably cost about $20 at a Safeway or equivalent big box store today due to the ever increasing price of food. How much can the same $20 buy at one of the smaller independent stores I go to? Well I recently went to a small grocer to find out. It’s called Persia Foods located in North Vancouver if anyone is curious. Below is a picture of everything I bought. It actually came out to $21.07 but you get the idea. There is enough produce here to last me for an entire week. (click image to enlarge.) I’ve also blogged before where I get cheap meat, other sources of protein, and grains. Last month I bought nearly 4 lbs of ribs in a West Vancouver supermarket for less than $8, and it took me several days to eat through it all. The point is it’s perfectly reasonable to eat well on $35 per week for an individual adult, which works out to $150 per month. Of course if people are buying all their groceries from Safeway then they can expect to pay $300/month or more for essentially the same diet. But that’s their choice. 😛
- Eating Out: By increasing my restaurant budget to $50/month I can spend more time to socialize with friends. 🙂
- Internet + Phone + Entertainment: A couple of things happened here over the last year. I finally upgraded to a smart phone earlier this year. No more flip phone for me lol. So I upgraded my cellular package to include a data plan. I also subscribed to Netflix which is an additional $9/month. So I’m paying $25 more for telecom services now than before.
Every other expense I have such as transportation, insurance, and utilities have surprisingly not gone up in value over the past 5 years. In fact, my auto insurance premium has gone down because I’m a road star now. 😀 I still pay about $25/month for heating and electricity as was always the case, even during the winter. Yay for apartment living. 🙂 Overall my total monthly spending is around $3K.
Random Useless Fact:
Avoiding your problems doesn’t make them go away.