10 lifestyle traps that you should be wary of

Chasing lifestyle may be good for your self esteem, but chasing it indiscriminately without worrying much about your finances can soon put you on the road to financial doom. Unfortunately, this can happen even if you have lot of money to begin with. It is not uncommon to hear of celebrities occasionally going bankrupt. Isn’t it?

The good is that a good part of it can be controlled, especially if you avoid falling prey to “I have arrived in life” syndrome and keep your bases covered.

Lifestyle inflation can dent your financial plans. And so can falling into some lifestyle traps. Here are some lifestyle traps you can be wary of, if you are looking to achieve financial independence in future.

10 lifestyle traps that you should be wary of

(This is assuming that you have a fairly stable source of income and you are not (yet) a high flyer businessman/ CXO kind of person)

  1. House bigger than what you need – If you are living on rent then you need to shell out more rent for a bigger house. If you are paying an EMI for an owned house then, you need to shell out a higher EMI and probably foot a higher maintenance bill too. A 3 BHK in Mumbai, for instance for a family of 2 may not be needed.
  2. Chasing expensive locations – While proximity and access to workplace is an important criteria (but not always possible!) chasing premium locations for the sake of living in premium location can be expensive. So if you are chasing life in Bandra West (Mumbai) or Greater Kailash (Delhi) just because of their coolness quotient, be ready to shell out money from your current (or future) income or compromise on the quality of home (very old construction, very small etc.) or both!
  3. Too many “enhancements” in home – That you have a home and want to upgrade it with (imported?) wooden panels and granite, Bose sound system, a big mini-bar and lot of other stuff, how do you do it? Easy. Throw some money. If you don’t have money, there is always a home improvement loan or a personal loan. Or maybe, max out your credit card limit and pay over next few months. And what happens to your finances next?
  4. Upgrading your car – A small car to bigger car to a sedan to a SUV – An upgrade every few years is something that you look forward to? Do you need it? Are you taking a car loan to finance it? While car upgrades are not inexpensive and cars lose value the moment they are out of the showroom, but who cares – it adds to the style quotient, and you love the feel of it!
  5. Fashion trap – Is your closet full of clothes that you don’t use (because there are too many of them, or they are out of fashion? And accessories too? And you keep on adding to your collection every few days because – retail therapy is the best therapy. Before you realize, fashion is poking a hole in your pocket!
  6. Love for wasting (food and other stuff)– Little bit of rice that you waste while having dinner may not have any major financial implication (that you should not be wasting food at all, is a different argument altogether!). However, the thing with habits mini-habits is that they manifest themselves in a range of scenarios. And you may probably not think twice before wasting half the food that you order when dining outside. Or throw away (unused)  stuff you purchased two years back, because it has reached its expiry date. Avoid little wastages and you can very well notice the money you can save and potentially invest!
  7. Addiction (Alcohol, tobacco, gambling etc.)– In excess these addictions can cost a lot. In terms or money and in terms of health (and insurance premium too!). But hey, I need to appear cool (and want people to envy my instagrammable lifestyle) …
  8. Partying rather too frequently – Love partying thrice a week – at different places and with lot of amazing food and alcohol? Do you check your bank/ credit card statements about how much they cost you, and what you could have potentially done by keeping that expense to half? And, this doesn’t even include the potential long term health cost or short term hangover!
  9. The education trap – This is a bit tricky one! While education is usually good investment, chasing “vanity” degrees (e.g. like MBA from a tier-3 foreign university or a non-descript undergrad degree from some unknown university) may be an expensive proposition. And the amount spent may have been better off earning interest in your bank account! The key thing to evaluate here is incremental benefit vis a vis other available options). But how does one do that?
  10. Expensive wedding trap – Well, this is a highly personal choice. Once can have a simple wedding if he/ she wants. But in Indian context, this is unlikely (barring few sporadic cases here and there), thanks to parental & societal pressure which often comes into play. But it doesn’t take away from the fact that weddings cost a lot, and for many it is almost lifetime worth of savings. Taking debt for wedding in family is not uncommon, which again has long term implications.

If you are hoping to achieve financial independence (or at least, partial financial independence), these lifestyle traps can be a big cause of worry and before you realize, you are set back by years in your pursuit. Even if you are not chasing any such “distant” goal, these expenses may just add up.

This may even be true if you have lot of money. As Nicholas Taleb mentions in his book Antifragile – “The record shows that, for society, the richer we become, the harder it get to live within our means. Abundance is harder for us to handle than scarcity.”

Is this lifestyle worth chasing? I will refrain from giving any straightforward answers but hopefully you’ll ask the right questions.



Not all of the above are purely financial decision. And some of them can be emotional decisions. And some may be dependent upon factors you have limited control over, especially if your family members think otherwise!

I have limited myself to lifestyle related expenses. There can be several other expenses which can derail your finances (which may not qualify as lifestyle expenses!)


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