[PERSONAL] Upgrading vs Making Do: My Dilemma with Lifestyle Inflation

I have a very complicated relationship with lifestyle inflation.

In personal finance literature, lifestyle inflation is bad, full stop. It is the ruin-er of life, the reason for debt and bankruptcies and subsequent financial hardships, broken families and in the worst-case scenarios, suicides.

Yet even knowing this, and even as I write this as a personal finance blogger (who is supposed to know what she’s doing), I, too have let lifestyle inflation happen in my own life.

For example:

• I used to drink instant coffee. Now I drink drip coffee with actual ground beans.
• I used to have housemates. Now I live by myself, thus paying the full rent.
• I used to sweep the floor manually, with a broom costing like RM15. Now I use a cordless vacuum cleaner costing RM700+ (and love it).
• And also, I just bought myself an iPhone, my first premium phone. My last three phones were all Xiaomi brands, costing only up to RM1200 or so max each.

To make things worse, I do all this in full awareness and knowledge that my income is not consistent: I am self-employed. I’ve been lucky enough to be earning okay for the last few years, but who’s to say it will continue?

It’s especially scary when I think of cancel culture. Much of my income now is tied to my identity as ‘Suraya the personal finance blogger’. If one day I do a boo-boo and gets ‘cancelled’, there goes the income too.

You don’t think I think about this? Of course I do. I have an exit plan in case that happens, too.

Anyway, back to the topic.

The reasonings I’ve used to justify my lifestyle inflation

Many of my lifestyle inflations are not whims. They are intentional. I’ve used various reasonings to justify the upgrades. For example:

“I can get this [more expensive item] for cheaper”

‘Brew your own coffee to save money’ comes up in almost every article about saving money, does it not? Therefore, I justified it.

Sure, I saved a lot of money if I compared my (wonderfully delicious and fragrant) home-brewed coffee with the Starbucks version. (I calculated. Less than RM1 per mug vs RM10 from Starbucks)

But the instant coffee was still delicious and that was just a few cents per mug.

Related: Malaysians Share How They Save Money on Coffee

“Buying this will enable me to earn more money”

I have definitely used this line of reasoning to justify the lifestyle inflation that are directly related to (1) reducing mental clutter, and (2) saving time. Two good examples are the decision to live without housemates and buying that cordless vacuum cleaner.

I’d like to think that those two decisions enabled me to be more productive and work more efficiently. Although of course I have no way of confirming this.

Related: How I rent a master bedroom in Kuala Lumpur for RM150 a month (not including bills)

“You’ve waited long enough”

I used this reasoning with the iPhone. It’s always been something I wanted, since iPhone 4 or something (I, too, love the branding. But most of all I’m just impressed by the word-of-mouth marketing they get – almost everyone I know who uses one, recommended it to me).

My delayed gratification game only ended after I legit dreamed about owning it, on a Friday night (Muslims will understand this significance). I bought the iPhone 11 the same day I tweeted this.

Mimpi beli iPhone…

Tahan nafsu lebih 10 tahun. Kalau sampai keluar mimpi…

— Suraya Zainudin (@surayaror) May 22, 2020

“Be frugal, not cheap”

I *used* to be cheap. By necessity, not by choice. Every cent counted when I was in my early 20s, working and living in Kuala Lumpur. I spent a lot of time trying to figure out more ways to cut living costs. I mostly bought cheap, flimsy, low-quality items, which broke down and wear out all the time.

And then slowly, as I started earning more, I replaced those items with more reliable, higher-quality ones.

Patiently waiting for that ugly & worn-out but still usable item to kick the bucket so I can buy a prettier replacement

— Suraya Zainudin (@surayaror) May 15, 2020

Related: Malaysians Share Cheap Things They Have Done

“You can afford it”

Simply put, I have savings. None of the lifestyle upgrades I chose will get me in financial trouble.

And isn’t money a tool we can use to avoid, outsource and fix what we don’t like? What’s wrong with using my money to fix my life, even if that ‘problem’ is just boredom? Neurologically speaking, we humans are wired to like and seek novelty.

Therefore, if lifestyle inflation happens in moderation, it’s okay right? It’s not as evil as how its frequently portrayed, right?

Right?

A Vain Conclusion

All this brings me to this personal conclusion: the majority of ‘lifestyle inflation is bad’-type advice out there, which warns people about the dangers of spending beyond one’s means, does not apply to me. Unlike other people, I *reasoned* my upgrades.

Which I’m aware is a pretty egoistical, boastful, and downright conceited thing to say.

This, in turn, brings me to another conclusion: I’m experiencing overconfidence.

This is dangerous. What if… I’m actually at the peak of Mount Stupid?

(This graph is a wonderful illustration of the Dunning-Kruger Effect)

I can’t afford to be overconfident in this matter. I mean, if I’m vain about my money management, how can I even identify problems if it happens? I don’t want to be blind to warning signs until its too late.

At the end of the day, I have to remember that many people lived beyond their means without realising it. It’s not like they intentionally want to get into financial difficulty, they just thought they could keep up with the payments, until they can’t. What makes me different?

So. Swallow a humble pie, Suraya. You ain’t shit. Keep learning.