With the arrival of summer, it’s easy to loosen the purse strings and give in to temptation a little more often than usual. Add to this the higher electricity consumption that the warmer weather brings, and you have the makings of a lifestyle creep capable of upending your budget and derailing your financial goals.
Key Points:
- Lifestyle creep is the barely noticeable inflation of your lifestyle that eats into your finances.
- Avoid impulse spending and start budgeting to develop healthy financial habits.
- Keep an eye on your bills for unexpected/inexplicable rate hikes.
Definition: Lifestyle creep is the slow, gradual inflation of your expenses and spending that eats up your income, leaving you unable to make financial headway.
To experience bill creep is to have your bills increase for no tangible reason. If you don’t keep a watchful eye on your bills, you will probably not notice bill creep until its effects on your wallet become painful.
How can you prevent summertime bill creep and the inflation of your lifestyle?
Lifestyle inflation has three components.
- Lifestyle creep results from the choices you make. Impulse spending is among its main causes.
- Bill creep results from various economic forces and corporate policies that shape the quality and costs of the services you use.
- Environmental factors contribute to increased seasonal energy consumption.
Of these three factors, you only have full control over your impulse spending/lifestyle creep. You can, however, exert some control over bill creep and your energy consumption.
Lifestyle creep is not a seasonal variable, although in the summer, being more active may tempt you to spend more. Bill creep has a seasonal component, as you tend to spend more on energy in the winter for heating and in the summer for air conditioning.
How Bill Creep Sneaks Up on You
Service providers will sometimes unexpectedly and inexplicably increase your bills. Having $20 tacked onto a $100 bill is a significant 20% increase that warrants investigation.
Why do such “pumps” happen? The service provider may change its corporate policies, or it may commit an error. Either way, it contributes to bill creep.
If you have set up automated drafts to pay your bills, bill creep can go unnoticed if you are not vigilant. What can you do to prevent a sneaky bill increase from sucking the life out of your earnings?
- Keep an eye on how much automatic drafts take from your bank account. Pay attention to how much you pay if you have not implemented automatic drafts.
- Retain some flexibility about the services you receive. If your provider increases your bills and is unwilling to backtrack/negotiate, consider a different option.
- Shop around for better deals on the service you need. Get at least three price quotes before you make a decision. If you find that your current deal is the best one despite the price increase, stick with it.
- Budgeting is your best tool to combat lifestyle/bill creep. Healthy budgeting allows you to quickly identify out-of-place spending, telling you exactly where your money is going.
Defeat Bill Creep by Controlling Your Energy Consumption
Summertime bill creep is usually more about increasing energy consumption than lifestyle inflation or inexplicable increases of your bills.
With air conditioning running around the clock, your energy bills can skyrocket. Some of this bill creep is inevitable. You can do plenty, however, to limit your energy consumption and the damage it does to your finances.
- The role of the thermal insulation of your home is to retain heat in the winter and cooler air in the summer. If you cannot close your windows properly and have other leaks around the house, the cool air you produce with costly electricity can escape.
- If you are still using old-fashioned, incandescent light bulbs, consider replacing them with LED bulbs. LED bulbs are up to 90% more efficient than incandescent bulbs in turning electricity into light instead of heat. In addition to saving electricity, you eliminate a heat source from your home.
- Unplug your electronics. Do not just turn them off. Most devices consume electricity while in standby mode and may also give off heat.
- Cover your windows with curtains/drapes during the daytime and open them in the evening/early morning to let in the cool air.
- Use a programmable thermostat. It can save you more money than one that you have to manipulate manually. With such a thermostat, you can keep your AC unit off for as long as you are away from home yet still enjoy a cool climate once you get back.
- Plant greenery around your house. Trees and shrubs shade your walls/windows from direct sunlight and can thus contribute significantly to keeping your home cool.
If you intend to put some of these tips to use to avoid summertime bill creep, remember that consistency is the key. Develop energy-saving habits, avoid impulse spending, and stick to your budget.
What to Do If Bill Creep Causes Credit Card Debt
What happens when you already have significant credit card debt from years of bill creep and lifestyle creep?
ClearOne Advantage can help you with credit card debt relief. If you are struggling with heavy credit card debt, don’t delay getting help for even one more day. Contact a ClearOne Certified Debt Specialist at 866-481-1597 to get a free savings estimate now.
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