3 ways to combat expense creep and avoid money traps

- May 17, 2023 3 MIN READ


The cost of living is constantly on the rise and you will, no doubt, have recognised a gradual increase in your expenses, notably due to cost of living and interest rates rises. Over time, you will have succumbed to expense creep caused by factors such as lifestyle, inflation and changes in circumstances. Expense creep is a common problem, but it be easily tackled with careful planning, writes money management expert, Jacqui Clarke.

There are a few common big money mistakes when it comes to expense creep. Luckily, there are also ways to combat it.

First, let’s explore the mistakes.

Big money mistakes

We all like nice things. But things can get expensive if you must drive a fancy car, wear the latest Louis Vuitton handbag or dine at the hottest restaurants in town. You are most likely buying things you don’t need with money you don’t have to impress people you don’t like.

This implies you have little to no understanding of your baseline costs or you have never attempted to capture, change or reduce them. Or you are doing nothing. You considered doing something on occasion but there was no planning, no goal-setting.

All the while, your superb income is being devoured by your expensive habits. You have become what is known as a permanent wage slave.

Overstretched expenditure

Take a minute to consider where you may have overstretched recently:

  • Have you upsized your house and mortgage?
  • Do you go to fancy restaurants more than the local pizza shop?
  • Do you select the more expensive grocery items or buy from a local boutique grocer?
  • Do you have more than one streaming service subscription?

Next, consider it from a purely monetary standpoint:

  • Do you purchase things now that require payments in the future?
  • Do you battle to save money?
  • Did you receive a pay rise and buy something new?
  • Have you received a tax refund and splurged it on something?

barista serving happy customer in cafe

Taming the expense creep

If you are shaken by how you responded to the above questions, you might need some assistance with taming your expense creep. You need to consider ways to avoid spending more because you are earning more, or spending more than you earn or can afford.

It’s easy to get bound up in the work treadmill (or hamster wheel) and not realise the impact of the ever-expanding choices associated with an increasing income.

So, let’s explore three ways to combat expense creep.

1. Create and stick to a budget

Creating a budget and tracking your expenses will help you identify where you are spending your money and where you can cut back. People don’t always know how much it costs to run their household, so knowing your ‘open the front door’ costs is essential.

Once you have a budget in place, it’s important to stick to it to prevent unnecessary spending.

2. Review your expenses regularly

A regular review of your expenses will identify areas where you may be overspending. This means reviewing your bills, bank statements and credit card statements to see where your money is going.

This will highlight unnecessary expenses so you can adjust your budget accordingly.

3. Avoid common money traps

There are many common money traps that can lead to expense creep. These include buying daily coffee(s) and fancy juices, impulse shopping and paying for memberships you don’t use – have you gone to that gym lately?

Other money traps include using multiple credit cards, relying on credit (or using a buy now, pay later option), not paying off the monthly credit card balance, and taking on costs such as expensive travel and school fees without the financial ability to pay for them.

Can you stop the creep?

Prior to your next expenditure, there are several things to consider that will help you on your way to taming expense creep, avoiding the typical money traps and feeling more in control of your finances.

Before you fork out for that new purchase, ask yourself:

  • Is it essential? Is it a want versus a need?
  • Are there any trade-offs you can consider?
  • Is the purchase negotiable or are there possible savings (mortgage interest rate, electricity costs, car insurance)?

Avoiding expense creep is crucial when the cost of living is high. By being aware of your expenses, tracking them regularly and making deliberate choices about where to spend your money, you can prevent unnecessary increases in your spending.

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