Ditch the “Lifestyle Creep” using this Simple Method

Let’s have a little recap of our college lessons, shall we? If you’ve ever been physically and mentally present in your Psychology 101 class when tackling about Maslow’s Hierarchy of Needs, you would know that it is a simple theory that organizes universal human needs and behavior in order of priority.

1. Brief explanation of Maslow’s Hierarchy of Needs

The most basic and fundamental ones start at the bottom of the pyramid. When you’ve climbed up through the lower four brackets, you have the freedom to reach your full potential.

Probably some of you might be wondering in those pretty little minds of yours, how does this pyramid align with any financial aspect?

Apparently, this psychological theory can be tied to your budget.

Allow me to use a very basic example and that is… FOOD.

2. Understanding each level of the Pyramid

Level 1 Physiological Needs: We eat to live and nourish ourselves, don’t we? When we only earn the bare minimum without considering our status in life, it’s okay to eat sa mga turo-turo street foods, hepa lanes, carinderias, and along the crowded marketplace. Why? Because your sole purpose of eating is survival and to sustain and re-energize yourself. You could care less about how flawed your surroundings are.

In other words, it’s quite hard to feel safe and secure if you don’t have adequate food. And it’s hard to create relationships when you’re struggling to meet your basic physiological needs.

But when you climb up to the second bracket which is the Safety Needs Bracket, you probably will consider the cleanliness of your surroundings or your need to eat in a decent spot with air conditioning and a sturdy roof above your head while you dine.

This time, you opt for Jollibee, Sbarro, KFC or Mcdonalds, and the like. Finally, you can say goodbye to eating beside bustling streets and say hello to the friendly guard opening the door as you stroll in the mall!

One level higher and you fall into the “Belongingness or Inclusion bracket. Before, you would chug your favorite instant 3-1n-1 coffee mix. But right now, there’s a sharp contrast! Your morning routine entails getting your caffeine fix from Starbucks or Dunkin Donuts. Talk about an upgrade!

How much does a latte or a venti cost these days? Diba? Nagbago na yung preference mo eh. You don’t just go to Starbucks to fill your tummy and conquer your hunger pangs but you go there to mingle or meet up with your friends. Or maybe an hour of solitude is what you prefer. After all, the aroma of finely brewed coffee, modest yet comfy furniture, and enchanting noises of people chattering whilst the blender is turned on make the whole dining experience satiable.

Under esteem: work clothing, professional development, dining out, and fitness (beyond basic health needs)

Now when you get to the higher level of the pyramid, namely the Esteem Needs, you would most likely opt for high-end restaurants or anything that screams “sophistication”!

“Well Ameena, it doesn’t matter how expensive it is, I’m here for the ambiance.”

Since our example revolves around food, you’d expect something edible that is to be devoured. But ambiance? Ambiance is something that wouldn’t land on your lips and satisfy your taste palette.

But here’s the thing: You feel expensive! Because of the name of the restaurant or the hotel, or the shimmering chandelier above your head, or because of the exquisite candlelit dinner your hubby surprised you with. May kandila pa eh may kuryente naman? Ironically romantic…but you see, that’s what you pay for.

Self actualization items include the extras: hobbies, vacations, and luxuries.

Self-actualization includes the extras. And when I say “extra”, I really mean extra, EXTRA!

The way I rationalize this, this probably calls for Salt Bae serving you a plate of gold with his notorious hand-sprinkling gesture. Or hiring your own personal chef to whip up a guiltless souffle partnered with a Nicoise salad. Perhaps a life representing this bracket allows you to just hop on your personal plane when you crave a meal at the other side of the world.

3. Lifestyle Creep

I hope you notice that as you climb higher up the pyramid, your expenses get higher too. We can use this example in other different aspects of our lives. Like before, your fashion sense constituted more of ukay-ukay finds and preloved clothes. Right now, a handful of your favorite pieces are branded with the famous buwaya on every shirt of yours.

I don’t demonize lifestyle creep. If you do have plenty of funds then by all means, buy what you want.

But if you have experienced increased income and are still trying to be extra mindful with your spending to reach a goal, I hope this article gives you a fresh and simple way of assessing your budget and financial priorities using Maslow’s Hierarchy of Needs.

These are the things we eventually pay for but the general idea of using Maslow’s Hierarchy is this: when money is tight and you don’t know how to prioritize your spending, assessing your need and wants based on our discussion above is a fresh way of figuring out your budget and your financial priorities. Couple this with creating SMART Goals and you have a solid base for planning your finances.

*Note: This post has also been published on the Coach Boost Gio website.

By Ameena Rey-Franc

Recognized as one of the Top Finance Blogs in the PH. Ameena Rey-Franc (founder of TTP) is a former Banker and BS Accountancy graduate turned Blogger, Keynote Speaker, and entrepreneur. Currently an RFP delegate, she is also the Author of a book about Financial Resilience and has held seminars for reputable companies like GrabFoodPH, Pru Life UK, VISA, JPMorgan Chase& Co., Paypal, Fundline, Moneymax, and many more. The Thrifty Pinay's mission is to empower women to LEARN, EARN, and be FINANCIALLY-INDEPENDENT no matter what life stage they are in.