Corey and I do very well financially. This good fortune was not always the case for us.

When we first graduated from college and got married, we were broke. We were also determined to live below our means. We moved to northern New Jersey (New York City Metro Area). This was a much higher cost of living area that we were used to, but we knew we needed to make it work (somehow).

I finally found a job as a street canvasser in NYC. Do you know those people who try to stop you on the streets of New York, DC, Boston, Seattle, or other large cities? Then, they ask you to give a donation to support the children or the environment? That was me. I did that for a year. I made $10/hour (plus performance pay) to stand outside in the rain, snow, and 100-degree heat.

Corey found a job working part-time at the university. It was very convenient since he was attending graduate school there.

The following year, we flip-flopped. Corey became the “higher” income earner in our partnership. He got a full-time job at the university with a slightly higher hourly rate (plus free tuition as a benefit). I accepted a position with a nonprofit through AmeriCorps and got paid $11,000 for the entire year (before taxes).

Those two years challenged us financially (and emotionally). We had very little extra money.

• We didn’t go out to dinner a single time unless someone else was paying.
• While I was street canvassing, I brought a peanut butter and jelly sandwich to work every day for lunch. It wouldn’t go bad if it was hot. Because I was outside all day with my team, I had to carry my lunch with me all day. All my colleagues would go out to eat every day for lunch. I’d sit in Chipotle (or another restaurant) with them. They’d eat their burritos (or some other tasty food), and I’d eat my PB&J.
• Our entertainment included a walk to the nearby grocery store to rent a $1 Redbox DVD. Heaven forbid we forgot to return it the next day and got charged $2. At the time, affording Netflix was a stretch.
• I remember one occasion where some friends invited us to go out in New York City for an evening. We went to a super cheap concert because friends were performing. Then everyone wanted to go out afterward. We each got one drink and were ready to go home. Everyone else wanted to bar hop. We tagged along but couldn’t fathom getting more than one drink. I remember being hungry and deciding it wasn’t worth eating until we got home. That was our grocery money and Corey’s school tuition money.

When we look back to our 2009 budget, we spent about $30,000/year for the two of us in the NYC metro area. It’s a struggle for an individual to live off $15,000/year, even if you are sharing expenses.

Money Buys Happiness… To a Point

People say that money doesn’t buy happiness. I disagree.

Within a few years, we were able to double our small income. This allowed us to both save a little bit of money and loosen up the budget. When we started to spend $10,000-$20,000 more/year ($1-2K/month), our lives got significantly better.

This phenomenon is supported by research. Money can absolutely buy happiness. This phenomenon only remains true up to a certain income level. In North America, that point is somewhere between $65,000-$95,000 for a good sense of well-being.

There is a significant difference in the level of happiness between a family that makes $35,000/year and one that makes $70,000/year.

The findings of the study align with our personal experience. We always prioritized saving (at last some) money and spending within our means. So, our quality of life dramatically improved as we increased our income from $30,000 to $70,000.

Our Best Lifestyle Inflation Decisions

Lifestyle inflation gets a bad rap.

Some lifestyle inflation is a very good thing. If you can afford it and if it adds happiness and value to your life, it can be worth it to spend more.

In this respect, I love one of the key messages from Ramit Sethi: to spend extravagantly on things that you love and cut costs on things you don’t.

I don’t necessarily think you need to go overboard (i.e. spend extravagantly). Spending at least some money on things that add value to your life can bring significant happiness.

We’ve made a lot of decisions to inflate our lifestyle that have added to our happiness.

1. Moving to a high cost of living area

One of our best decisions was to move from northern New Jersey (a moderately high cost of living area) to Boston (a very high cost of living area). When we made this move, our housing costs went up by almost 50%.

When we first moved to New Jersey, we were shocked by the housing prices. We transitioned from paying $500 for a three-bedroom apartment in Tennessee to over $1300 for a tiny one-bedroom apartment. An increase from $1300 to $1900 felt less shocking.

While we were spending more money on housing, our quality of life increased.

• We loved being surrounded by a lot more people our age which made it a lot easier to make good friends.
• Our commute time decreased, and we are now able to take public transportation most of the time.
• Moving to a higher-cost-of-living area gave us access to better jobs. This has allowed us to increase our income over time, and it has allowed me to find a great part-time nonprofit job.

2. Upsizing Our Living Space

Our current condo (1,000 square feet) we finally have a second bedroom and a dedicated dining space. These are things that we truly value.
The extra bedroom allows us to host out of town guests comfortably. We live far away from our families, and we love it when they come to visit.

Before we had the extra bedroom, people would often stay on an air mattress in the middle of our living room floor. We love being able to provide a comfortable space for a visit. It also feels less overwhelming when people are here when they have their own space.

We also LOVE to have a dedicated dining space. In all our apartments before this one, we’ve either had a small dining table either in the kitchen or living room.

Corey and I eat dinner together at our table almost every night. It allows for better conversation than sitting in front of the TV. We also love having friends over for a meal. If we bring out the extra folding chairs, we can accommodate 8 people at our dinner table!

3. In-Unit Laundry

If you’ve ever had to use a laundromat, you’ll know what a luxury this is!

When we lived in New Jersey, we didn’t have laundry in our building. Every other week, we’d spend most of a day in a laundromat across town washing, drying, and folding.

When we moved to Boston, we got our first in-unit laundry. It was amazing to be able to do laundry whenever we wanted. We could throw a load in and leave for a few hours if we wanted to. We could throw in a load of laundry mid-week.

If we have a choice, we will never go back!

4. Getting a Dog

We got our dog in December of 2013. At the time, I wasn’t a dog person. Over the course of 5 years, Corey wore me down. I finally agreed if he could find me a dog that was hypoallergenic that would look like a puppy forever.

via GIPHY

We ended up getting a goldendoodle from a family friend out in Washington State. When we welcomed her to our family, I was in love.

Yes, we bought a dog for about $1,000. We also need to make sure she’s well-fed every day, groomed every 6-8 weeks, and stays healthy. Dogs are not inexpensive. This year, we spent about $1,500-$2000 to take care of our dog.

Now that we can afford it, it’s absolutely worth it!

5. Restaurants/Entertainment Spending

We’ve come a long way from not being able to eat out unless someone else is paying for it. We enjoy being able to use some money to do fun things.

We love being able to go see a movie that we are very interested in seeing (i.e. anything related to Avengers or Star Wars). We like trying out new restaurants or visiting old favorites.

We’ve also found that it can be important to spend money on these kinds of things to build new friendships. Once you know someone well, it’s easier to invite them over for a game night. While you are still getting to know them, it’s more likely that you’ll go out to get to know each other.

I sometimes wonder if part of the reason we had so few friends in New Jersey was that we had no money we could spend to go out.

6. Buying Good Shoes and Replacing them when they Wear Out

I have dealt with foot injuries for a few years. About 5 years ago, I had a stress fracture in my left foot that took about a year to heal. For the past two years, I’ve been dealing with a pinched nerve in my right foot.

Buying comfortable, supportive shoes and special insoles is vital to me being able to do my everyday activities.

I now buy a very expensive (~$160) pair of running shoes every 4-6 months (whenever they start to wear out). Sometimes I see people wearing shoes for years. I’m so glad I can get new shoes whenever I start to feel them wearing out (and that I have given myself permission to).

7. Paying for Mental Health Expenses Out of Pocket When Needed

Last year, when I was experiencing severe anxiety, I ended up quitting my job. When I did this, we lost our health insurance and needed to get onto Corey’s insurance plan.

With the switch of insurance, my therapist was no longer “in-network.” Given where I was mentally and emotionally, it would not have been good for me to try to find a new therapist.

Because of this, we opted for a more expensive PPO health plan with a lower deductible. This way I could continue to see the same therapist. She would be able to bill as an “out of network,” which was great. This also meant that I needed to pay in full for every therapy session until I hit my insurance deductible.

Our total health care costs for the year increased quite a bit. I look back, and I’m so happy that we had the ability to make this decision.

8. International Travel and Exploration

When we were struggling to make ends meet, we would still try to get away for some kind of vacation each year. We’d often go camping. One summer we went to Cape Cod for a long weekend. For another, we rented a cabin in Maine.

These trips were very economical since paying for airfare wasn’t necessary. In most of these places, we were able to bring and cook our own food, which helped us save quite a bit of money.

As someone who traveled quite a bit in high school and college, I had the itch to travel more.

At this point in our financial journey, we travel internationally about once/year. I love to explore new places and see new sites. Traveling is always one of the highlights of each year for me.

Now that we’ve also started using travel rewards, we’ve been able to save some money on travel. Right now, our goal for travel hacking is to spend less. Long term, we’d like to use travel hacking to travel more often.

If You Inflate Your Lifestyle, Make Sure It Provides Requisite Value

Over the years, we’ve made a lot of great decisions to inflate our lifestyle. These decisions provided value to our lives and brought us happiness.

It’s also important to note that some types of lifestyle inflation do not bring happiness. This has also been true for us.

When we were both working full-time and felt very stressed, our food spending got out of control! We’d order take out multiple times per week. We got to the point where we got so sick of all the take-out options that we’d open the Grub Hub app and not want anything. We’d find something to order anyways and then our groceries would go bad before we could eat them.

At that point, we were spending about $1,500/month on food. When we realized that this wasn’t adding value to our lives, we started to get serious about reducing our food costs.

We now spend about 50% less on food (groceries and restaurants). It did not detract from our happiness, and we now find ourselves looking forward to eating out. It feels like such a treat!

It’s important to figure out for yourself what you value and what spending makes you happier. If you have disposable income, spending it on things that you value can add a lot of happiness to your life. If something doesn’t add significant happiness though, it’s a place to cut costs.

What are your best lifestyle inflation decisions? Where have you decided to cut costs because something didn’t add value?