Why Living Within Your Means Feels Hard (And Why Culture Makes It Harder)
Keeping up with the Joneses isn’t new. In fact, Arthur “Pop” Momand coined the phrase in 1913. But here in 2026 it’s more relevant than ever. Social media, advertising, and cultural norms all push toward stretch, upgrade, and impress. You’ve gotta get that pic for Insta! You need to be envied. Right?
I heard Morgan Housel, author of The Psychology of Money, say in an interview that we get more joy from financial success when others observe it. Think about that for a second. If you achieve some financial milestone, but are only aware of it yourself, it may feel good. But if your neighbor, friend, coworker, or Facebook follower sees it then it actually feels BETTER! That’s insane. But this widespread amplification of our highlight reels has made this phenomenon even stronger, and unfortunately, living within your means even harder.
I’ll go a little further. In the book The Four Hour Work Week by Tim Ferriss, he gives the analogy of buying a fancy new BMW, showing up to work in it and enjoying the envy of your peers. Until the following day when one of your coworkers shows up in a new Lamborghini and instantly overshadows your BMW. Ouch. It’s a competition you really can never win.
Lifestyle Creep — The Reason Most People Never Get Ahead
If you haven’t read my financial disaster story, you can do that here. I got my master’s degree from the school of hard knocks. As a result, I vowed I’d never go down that path again. From that point forward I made the choice to always live within our means.
When we went to buy our house 9 years ago, the mortgage broker really wanted us to stretch the budget. They told us we were qualified for so much more than the price range we were shopping in. When we bought our current vehicles we paid cash, for used cars, and didn’t even consider financing or leasing something newer or nicer. At this point I was earning far more than I was back when I had that financial meltdown. And I chose to live modestly.
But I know that my experience 15 years ago shaped me. It changed me as a person. And for that reason, from that point forward I was an anomaly. A financial freak. More commonly, when someone’s income goes up, they run right out and treat themselves. So their spending keeps pace with their earning. The shovel gets bigger, but so does the pile of dirt. And for that reason, they aren’t able to get ahead. This is what we call lifestyle creep.
For most people it’s unconscious. They either learned the behavior from adults when they were growing up. Or, they simply naturally fall into that pattern because our marketing industry is doing all they can to encourage it, and most of their peers around them are doing it too. Living within your means is not the road most traveled.
The Hedonic Treadmill and Why More Never Feels Like Enough
Aside from the ongoing one-upmanship between you and the Joneses, we also play these mental games with ourselves. Enter the hedonic treadmill. It’s a situation where when you do get an increase in income and upgrade your lifestyle, you get used to it. Once you’re used to it, you want something better than that. And then better than that, and so on. It’s why they call it a treadmill. Because it never stops.
For this reason, you’re never satisfied and more never feels like enough. It’s why living within your means is so important. Sheryl Crow said it best in her song Soak Up the Sun:
It’s not having what you want, it’s wanting what you’ve got.
The Biggest Choices That Determine Whether You’re Living Within Your Means
Lifestyle creep can show up in a variety of ways, but there are a few especially common ones. And, they happen to be the ones that will wreck your finances the fastest, or at a minimum make it more difficult for you to save money and build a financially independent future.
About Houses and Living Within Your Means
First, houses or even apartments. Professional advisors like mortgage brokers and realtors, benefit from you stretching the budget. Bigger buy, means bigger commission. Don’t fall for it. After getting my ass handed to me on several houses in the global financial crisis, I vowed never to over-extend on a property again. Hence my story above about our current home. I didn’t want to be house-poor. Instead, I wanted to have disposable income to save, invest, and yeah, spend on fun experiences like hiking gear I use every weekend, or guitars I play daily.
I did it knowing that no one was going to see my house and be impressed. They weren’t going to think to themselves “wow, that guy is doing really well” or “he must be rich!”. They would see my house and think “middle class, average Joe” and I was perfectly fine with that. Because I never stressed over a mortgage payment, or wished we hadn’t over-bought. I slept soundly in my modest home.
About Cars and Living Within Your Means
The next big one is cars. Oh boy, hot potato here. More than anything else, I think this is where people really make mistakes. Every realtor I ever met was driving a Mercedes, BMW, or other luxury car. New, probably leased. Beautiful to be sure. But having had several hundred real estate agents work for me in the past I knew something about their income. 90% weren’t making nearly enough to justify driving a car like that. 10% were.
I can hear the objections in my head now: “But Brett, it’s for my work! You know I have to exude success. And I drive my customers around in this vehicle.” Yes, I’ll concede that there are tax write-offs available for business expenses like this. However, for every one person claiming their auto as a write-off, there are 100 others who got it because it was cool, would make them look like they were successful and hopefully garner the envy of their peers. Gross.
And frankly, as a top 5% agent in the state of Texas myself for many years, I drove a used Mitsubishi SUV. And I think my clients appreciated that I didn’t give the appearance that I was over-charging them to pay for my ride.
Anyway, the average car payment in America right now is hovering around $700 a month. To pay $700 a month, you have to earn around $1000 a month. Plus, you’ve got higher insurance costs, because the value to repair or replace is higher. You have higher maintenance costs if you exceed the warranty or have repairs which aren’t covered by one. Plus fuel, tires, and the list goes on. It’s a horrible idea. And a Toyota Camry will get you from point A to point B as well as a Land Rover, and it’s a better quality car, with lower maintenance costs. Also, it’s nothing to be ashamed of.
What Freedom Smells Like
I say to my friends when we talk cars, “new car smell fades quickly, but my car smells like freedom”. Soak that in. Smells like freedom. This is huge. My car is 10 years old this year. I bought it 6 years ago for cash. It’s nice, but not like a new Mercedes. And I’ve never regretted it one day in my life.
And if an unknown scratch shows up occasionally from a wayward shopping cart, it doesn’t break my heart. Yeah, I don’t like it, and I do my best to keep it looking nice. But trust me when I tell you that a scratch on your brand new Beemer hurts much worse. Again, living within your means is a choice.
Where You Live Matters
OK, one more example. I’ll say it a few ways. First, when I used to live in Texas, I’d speak with my colleagues who lived in California. I was living in a very affordable middle class home. It was lovely, and we were more than content. They were living in 2 bedroom, 1 bath bungalows with no garage that cost two and even three times what our home cost. I’d ask them, “why do you stay there?” They worked for the same company I did, and were earning roughly the same amount. Yet my lifestyle was much more comfortable than theirs.
Today I live in Denver. Not a cheap place to be either. My family still lives in Kansas. Their homes are twice the size of mine and half the price. Yeah, I know, they live in Kansas. I get it. There’s a premium to live in places where the views are prettier and the climate is milder. But where they are, generally speaking, the stress to maintain a high quality of life is lower. Just like Texas was to California above.
Sometimes when my friends lament to me about the cost of living, or the stress associated with it, I remind them that they have choices. They could move to the midwest, or deep south, and cut the cost of living by nearly 50%. I understand they may not want to, but it IS an option, should they choose to prioritize affordability over good weather. I know there are factors involving job opportunities as well. But several of them work remotely, so that’s not a factor.
More On Geo Arbitrage
To illustrate it in an even more extreme example. I see Americans on YouTube talking about moving abroad. There are places in the world where a modest social security check will cover their monthly expenses by multiples. For example, Thailand, or the Philippines, or the Balkans. Trade offs to live there? Oh yeah. But I ask you this: do you think there are people living in those locations right now who are happy? It’s rhetorical. Of course there are. Lots of them. So is it the same lifestyle as living in Denver? No. But is it a good lifestyle for a fraction of the cost? I think it may be. Although I do not speak from experience… yet.
Point is, you have choices. Now, you may not want to make those choices, but you have them. You can choose a house that doesn’t stretch you to the max. You can choose a car that’s nice enough, and my wish for you is that it smells like freedom. And you can choose your geography, among many other decisions which will affect living within your means.
What Living Within Your Means Actually Looks Like in Practice
To be clear, I’m not talking about deprivation. Rather, I’m talking about design. Knowing what you value and spending there while cutting everywhere else. Don’t get sucked into the marketing or cultural trap of having to try and outdo the people around you. Even if for some reason you’re able to sustain that, you’re making it so much harder for yourself.
I know people who are millionaires and are stressed out because they’re held hostage by a high-paying job to cover their massive bills, or they don’t have enough savings to cover a runway long enough if they have a major health crisis or something similar. This is about peace of mind and contentment. Again, I’ll say, freedom is my currency. I hope it is yours too. Would you rather have a nicer house, or would you rather be able retire early? Would you rather drive a fancier car, or would you like to be able to walk away from any job that doesn’t bring you joy whenever you want?
I encourage you to test this out. Get some forward-looking planning tools to see how your choices compound over time. I use ProjectionLab, but Boldin is also a good one. Once you see it, you can’t unsee it. You’ll be amazed the effect that saving a car payment every month has on growing your wealth. But that’s just one example, so try a variety of things and see what the price of freedom looks like.
When Life Changes, Your Plan Has to Change With It
As with anything in life, you have to remain flexible. Things will happen, and you will need to adapt and change along the way. Sometimes this includes expanding. If your income goes up by 10%, great! You can upgrade your lifestyle by 5%, but keep the other 5% to invest or save. This is still winning. There is nothing wrong with having nice things, getting better cars or houses, but only when it isn’t stretching you to the limit. There are so many rewards to living within your means.
As with all my posts, if you’d like to discuss anything I said, or share your own view, I’d love to hear it. Use the contact page, or comment below.