Where did all my money go?

A dinner out here and there turned into dinners out regularly, which turned into dinners out regularly with a few takeout dinners thrown in, which turned into dinners out regularly with takeout dinners most other nights. The slippery slope from one into the next was invisible, but when we finally thought to pay attention, we realized we were spending a fortune on food.

-- Work Optional: Retire Early the Non-Penny-Pinching Way

Perhaps, this story resonates with you.

When you still have the money to spend, spending a little money here and there doesn’t hurt that much … until one day, you wake up without any money coming in.

The spending that gradually piles up until it’s expensive to maintain is called lifestyle inflation.

From Work Optional: Retire Early the Non-Penny-Pinching Way:

Lifestyle inflation is a phenomenon that affects people at all income levels and is the result of a psychological phenomenon called hedonic adaptation, which is the tendency we all have to adapt quickly to changes in our lives and return to a baseline level of happiness, regardless of how many good or bad things may happen.

It’s no accident why you are where you are right now financially.

And we’re all susceptible to spend mindlessly, especially when we have the capacity to do so.

But if the water runs dry when you least expect it? What will you do, and where will you go?

If you don’t want to suffer the consequences of spending beyond your means, it’s time to monitor where all the little foxes appear and stop yourself from unnecessary expenses you can actually live without.