How Do You Not Let Your Expenses Grow With Your Income?

[Dominik Perrenoud]

Hello financially intelligent people

How do you not let your expenses grow with your income? This question has been on my mind lately due to significant changes in my financial situation (for the better, luckily).

Let me quickly give you a bit of my background. I read "Rich Dad Poor Dad" by Robert Kiyosaki in 2015. Since then, I've been hooked on everything finance, investment and mindset related. I've read books, listened to podcasts and read many blog articles on BiggerPockets, of course. 

So I thought my money mindset was on point, particularly when it comes to spend less than you make. Until about a year ago, I was living on a student's "income" that more or less covered basic spending and nothing more, which was fine for me and even allowed me to put a bit of it on the side over the years...

...which I then spent on my first car as soon as I got my first real job. And this is where it gets tricky for me. After more than doubling my income in said job over the last year (having started as an intern), I repeatedly find myself looking for loft apartments twice the rent of my current place (where I actually like living), unnecessary modifications for my car and the like. 

I always thought I was above that kind of thinking (aka expanding your spending with your income) because I managed to get by on a much smaller income. Now I'm realizing I'm very much like everyone else in this regard - what a horrifying thought.

Recently, I read "Your Money or Your Life" and very much liked the concept of "enough" in it. Basically, that's the point where more stuff doesn't add anything of value to your life. Also, I started reading a little bit about Buddhism - okay, it's The Dalai Lama's Cat... Given that the author knows what he is writing about, a core learning in Buddhism seems to be that true happiness comes from the inside, not our circumstances. Also a concept which I very much endorse. 

So why the hell can't I stop thinking about that $3000 carbon rear wing for my car?

My guess is that my subconscious tells me that now, finally - with my first actual income after 25 years of, well, basically minimum wage, starting at birth - I deserve to get all the nice things. So by denying them to me, I am cheating myself out of what I have been waiting for for the last 15 years or so. In any case, I find it really hard to struggle against it, even though I firmly believe the right mindset switch is up there in that bald bubble above my eyes.

Now - if you have borne with me until here, let me ask you: How have you managed to not let your expenses grow in step with your income?

What has helped you get your mindset in order so as not to feel you're depriving yourself of anything while your income is growing?

[Arlen Chou]

@Dominik Perrenoud from your post, it is obvious to me that you already know it is a mindset shift you need to move from where you are to where you want to be. You just have not found that event, place or thing that will create the shift.  

For me there were 2 very distinct moments in my life. In high school I worked in the kitchen of a convalescent home. Being around people at the end of their lives and talking to them about what they did and hearing about what they wanted to do, really puts life in perspective. People never regretted the things that they did, even if they were wrong or if it was not the best decision. But many regretted not having the money to be living the balance of their lives outside of a convalescent home... and many attributed their situation to poor financial decisions when they were young.  

The second moment that effected my mindset was more recent. I was doing business in the Philippines for many years. I traveled there almost every month for years and got to know the people beyond the aspect of business. I went to a Christmas party where the home was nothing more than a shack with a single bare light bulb and no running water. These people had nothing but it was seriously one of the most memorable moments in my life.

My mindset has never been the same since either experience. If you want to make a mind shift, actively choose to see the world for more than a nice pad and a useless carbon fiber wings on a car that will probably never be on a track.

To fight the millions of Instagram posts and heavy marking in mass media that try to drive me toward useless consumer spending, I try to keep my mind and desires in check by getting a does of reality.

Last year I took several weeks to motorcycle through Vietnam and took donations to several orphanages. That was a serious eye opener. I also went to El Salvador to help build a house for Habitat for Humanity... another reality check.

I am not saying go quit your job and become a monk. I am saying that for me, seeing that most of the 7.7 billion people in this world have less than me and that they can be happy without the extra bling that social media throws at us, puts my spending in perspective. Perhaps if you spend some time and consistently volunteer to feed the homeless or get on a plane and go to a third world country to volunteer on a clean water project, the reality of larger world will make your desires to spend on bling less significant. 

Anyway, it is great that you already acknowledge that you need a mind shift, you just need to find the tool to put yourself right... what ever that means.

Good luck to you!