Money Management Tips
Money at 30: CES, Tech Temptation, and Lifestyle Creep
Yesterday I returned home from a week-long stay in Las Vegas, Nevada. The main purpose of my visit wasn’t gambling or any particular Cirque du Soleil performance (although I did manage to see one while in town) but to attend this year’s Consumer Electronics Show. This being my first time, it’s hard to say how the 2019 edition of the annual convention compares to years past, although I heard from some that the payoff was slightly underwhelming. However, what took me by surprise was just how impractical much of what I saw was.
Don’t get me wrong — I did come across some pretty cool displays and tech. Heck, I even discovered a couple of new finance-related apps I plan on reviewing in the future, along with some handy travel accessories. Yet it seemed to me that most of what was being sold or teased at the show amounted to tech distractions that are often a symptom of lifestyle creep.
So what is this lifestyle creep I speak of? Let’s take a look at what it is and how CES might actually help drive it.
What is lifestyle creep?
The idea behind lifestyle creep is that, as consumers, we tend to start reclassifying certain luxuries as necessities. Perhaps the best example of this lies in our reliance on smartphones, leading us to spend hundreds of dollars on the latest and greatest every couple of years. Beyond the “tech temptation” aspect, matters of convenience can also play a big role in lifestyle creep, with services like DoorDash, Uber Eats, Instacart and others now being hailed as saviors for some busy souls — but at what cost?
What causes lifestyle creep?
When it comes to creep, some major contributing factors are rising incomes or decreasing costs. On the surface that may sound counterintuitive but it turns out that an increase in discretionary and disposable income leads people to start splurging more and growing accustomed to said splurges. Often times this just ensures that individuals spend within their means instead of living below their means and saving for the future. In fact, this is may be the largest threat that lifestyle creep presents.
Are all tech upgrades “lifestyle creep”?
Hardly. There’s no doubt that advancements in technology can not only improve your life but can also make previously unattainable luxuries more affordable. Moreover technology can make things more efficient and manage to save you money in the long run.
To that point, there’s also something to be said about investing in certain high-dollar items to save money down the road or even generate income. This is something I recently encountered while looking at podcast equipment as well as what I was considering a couple of years ago when shopping for a vlogging camera (incidentally seeing the four-generation-newer model of my camera at CES was abundantly tempting). In these instances it was up to me to justify the cost and determine whether these purchases were actually lifestyle creep or required tools for furthering my goals.
What does this have to do with CES?
I’m glad you asked. At this year’s event the talk of the Strip was the impending emergence of 5G technology. Although I did kind of skewer the idea of buying a new cell phone every two years, this network upgrade could actually be a great thing for consumers — perhaps even allowing them to switch from traditional broadband Internet solutions and (hopefully) lowering their bill in the process. While there are still questions about what spending temptations this technology will bring, on the whole, it seems like a good thing to me.
Meanwhile another one-number, one-letter moniker I saw over and over again at the show was 8K. If you’re keeping score at home, that’s twice the current 4K, which itself was nearly four times the 1080p high-definition standard. So did that new TV you just purchased for last year’s big game just become obsolete? While LG, Samsung, and other might want you to think the answer is “yes,” I can think of fewer perfect examples of unnecessary luxury upgrades ripe for lifestyle creep. Yes, at some point 8K televisions may become the norm and prices will fall significantly — but being an early adopter comes at quite a premium. Is it really worth it?
If I took anything away from this year’s Consumer Electronics Show its that there’s a lot of crap out there you probably don’t need. I’m guessing that’s not really the lesson Google meant to teach me while I was enjoying their fun Google Assistant Ride (advertising another product I find less than essential) but it’s true. As tempting as a few of the items on display may be, it all reminded me how susceptible we are to lifestyle creep and how, in turn, these tech temptations can jeopardize our actual standard of living. This isn’t to say that I’m completely immune to lifestyle creep or other splurges but, hopefully, just being aware of the phenomenon can help you make better financial choices and prioritize your spending on what’s really important to you.
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