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“Lifestyle Creep,” the silent threat that haunts Wall Street white collars workers

Ever wonder why your new raise does not lead to a greater balance in your savings account? “Lifestyle Creep” could be the culprit.

FILE PHOTO: Visa credit and debit cards are seen in this picture illustration taken August 2, 2022. REUTERS/Benoit Tessier/File Photo
Benoit TessierREUTERS

Have you ever received a raise at work only to feel like it hasn’t made a dent in your ability to save? While inflation often takes the blame, there could be another factor at play—one that you have far more control over.

Enter Lifestyle Creep,” a viral finance term that describes the phenomenon of increasing your spending as your income grows rather than boosting your savings. When your additional earnings are offset by higher consumption, your savings potential dwindles, leaving you right back where you started.

For workers on Wall Street, like Vivian Tu, a personal finance influencer and trader at J.P. Morgan, who spoke with Pop Sugar, the pressure to keep up with the lifestyles flaunted by peers can be overwhelming.

@yourrichbff

Answer to @jkiev Don’t be a CREEPER - in every sense of the word! #money #finance #rich #savingmoney

♬ Creep - TLC

A sort of “keeping up with the Joneses” effect takes hold, and before you know it, as Tu explains, extra income can quickly disappear on weekly manicures, dining out with friends, or other indulgences. Tu and other financial experts aren’t suggesting that people shouldn’t treat themselves occasionally, but they emphasize the importance of being mindful of consumption if saving is a priority.

You might be interested in: What is the 50-20-30 rule? The budget rule to save regardless of your salary

The different realities for workers across income spectrums

While Wall Street workers, with their above-average incomes, may find it easier to cut back on unnecessary expenses, many Americans live in a very different reality. In December 2024, the personal savings rate in the US stood at 3.8 percent, far below the pre-pandemic level of nearly seven percent, according to the U.S. Bureau of Economic Analysis.

For many workers who have seen their ability to save decrease over the last five years, lifestyle creep isn’t to blame. Instead, higher costs for essential goods have reduced their purchasing power and forced them to rely on high-interest credit cards to bridge the gap left by stagnant wages and rising inflation, sinking deeper into debt just to make ends meet.

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