How to Spot (and Avoid) Lifestyle Creep

Bruce Sellery’s 2013 Toyota RAV4 has seen better days, but as long as it gets him where he needs to go, he’ll hang on to it for as long as he can. While Sellery, the Chief Executive Officer of non-profit agency Credit Canada and host of the money-focused Moolala podcast, could buy a new vehicle, he’d rather put more of his discretionary income toward other priorities – like travel and consistently setting money aside for the future.

Why? Because, as someone who regularly speaks to others about money, Sellery knows that, for many, it’s easy to spend more as their salary grows, a pattern called lifestyle creep.

Statistics Canada recently showed incomes have been increasing in Canada, with average hourly wages up 4.7 per cent year-over-year in March 2026.¹ As people earn more, they may feel more comfortable buying a new car or spending more on vacations. Over time, this higher spending means people could have less room for savings and investments and potentially more debt.

The good news is that lifestyle creep is largely behavioural, and once you understand how it takes hold, it becomes easier to spot – and easier to avoid.

A thousand small decisions

The instinct behind lifestyle creep is deeply human. “We always want more,” says Sellery. “We want more comfort, we want more convenience, we want more adventure.”

The trouble starts when that drive aligns with a bigger paycheque, because the extra income makes every small indulgence feel that much more deserved.

Of course, earning more and spending more isn’t inherently bad. What matters is whether saving keeps pace, says Sellery. “That’s kind of the key differentiator.”

Most people are oblivious to lifestyle creep while it’s happening. A long day at work might end with a take-out order. Scrolling on a phone might result in the impulse purchase of a new sweater. A friend’s movie recommendation might yield a new streaming subscription. Individually, these may seem like insignificant, even reasonable choices, but they could add up to a life that costs more than it used to.

The creep is becoming more difficult to resist. Credit has never been easier to come by, Sellery notes. “Unless you are perceived by a lender as being a grave serial credit risk, you can borrow money in this country.” Consumer culture has also become really good at getting us to spend our money. Marketers know how to trigger the dopamine hit we get from shopping, and the FOMO of social media exacerbates that sensation, says Sellery. “It’s just harder for human beings to avoid lifestyle creep than it has ever been before.”

How to stop the creep

The first step is identifying lifestyle creep in your finances. Sellery suggests a simple self-check. Think of yourself today and your future self in 20, 30 or 40 years. “Look in the mirror and say, ‘Am I balancing my present and my future? Am I balancing them in a way that’s consistent with my goals?”

The next step is recognizing that saving is a habit in the same way that spending is, and that habits can be trained. Sellery likens it to the difference between eating well and being on a diet. “You can’t be on a budget for the rest of your life. Instead, teach yourself how to live sustainably.”

For investors looking to stay ahead of lifestyle creep, a few practical tactics can help change habits so saving becomes comfortably routine.

• Raising your savings rate alongside your income. When earnings increase, savings should move with them. Sellery’s rule of thumb is to save what inflation doesn’t erase. A three per cent raise against two per cent inflation leaves one per cent that can be redirected to an RRSP, a TFSA or another investment tool.

• Automating the outcome you want. Willpower has its limits, but a scheduled transfer doesn’t. Consider making automatic contributions on payday (or increasing existing contributions) to ensure a portion of your paycheque is invested before it can be absorbed into day-to-day spending.

• Embracing “friction-maxxing.” This TikTok trend is about making it harder to spend impulsively or on autopilot. In your own life, it could mean removing stored credit cards from e-commerce sites, deleting food delivery apps, cancelling subscriptions that automatically renew or taking a short pause between wanting something and buying it. A pause is often all it takes to turn an impulse into an intentional choice.

• Not restricting, but redirecting. Cutting every indulgence isn’t realistic. Instead, consider putting your money towards more meaningful items or experiences. Splurging on a memorable dinner once a month can be less expensive and more satisfying than spending $20 to $30 on lunches at work more often.

• Know what your money is paying for. Lifestyle trade-offs become easier when there is a defined reason for them. Sellery encourages people to think in terms of balancing present needs with future priorities, rather than framing decisions as sacrifice.

Ultimately, managing lifestyle creep isn’t about wanting less. It’s about knowing what you’re choosing, and why it matters.

“I totally get and validate why you want what you want,” says Sellery. “And I still encourage you to make conscious choices about how you manage a finite resource.”