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:
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.
Lifestyle inflation has three components.
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.
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?
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.
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 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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