Airport lounges - serious money saving or a waste of cash?

Travelling abroad can be exhausting – so wouldn’t it be nice to get the VIP treatment and relax in a private space away from the crowds? From comfy seats to cocktails, Moneywise finds out what’s on offer at airport lounges and whether it’s worth investing

Airport lounges are no longer exclusive hideaways for high-flying executives and passengers travelling first- class – anyone can get some pre-flight peace for a few quid. Alongside the buffet, booze and free wi-fi, some airport lounges offer some swanky extras. The SkyTeam lounge at Heathrow Terminal 4, for example, has a Clarins Wellness area and PlayStation room, while Sleep ’n Fly in Dubai International has igloo-style sleep pods.

But when considering whether to book an airport lounge, it’s important to understand the difference between airline and airport lounges.

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Airline lounges tend to offer the most exclusive facilities, with massages, sleeping areas and showers typically available alongside rest areas with unlimited food and drink. But most airline lounges are restricted to first- and business-class passengers, and frequent flyers.

Airport lounges, on the other hand, are much more accessible. Brands such as Plaza Premium, No1 Lounges, and Swissport run facilities in airports all over the world, and these are open to everyone – at a price. In general, you get what you pay for; prices range from about £20 to more than £45 a visit.

If you just fly a couple of times a year, you can buy a lounge pass for the airport or airports you’re travelling through on a one-off basis. But the big question is: is it worth it?

Tom Bourlet, travel blogger at Spaghettitraveller.com, reckons it is.

“The cost is normally around the £25 mark, which might sound steep, but as airport costs all start to add up, it seems to be worth it by the end,” he says.

“You get a private wi-fi connection, which is a lot faster than the basic free one everyone uses in the airport. You get a large range of food, both hot and cold, while there are unlimited drinks – not a bad perk if you are a few hours early. Depending on the airport, you can normally get much more comfy seating, plenty of space and your own private booth.”

Customers on lengthy layovers will arguably benefit from lounge access more than people who simply arrive early for their flight. You can normally pay for lounge entry on the door but, with lounges often capping the number of people admitted at any one time, it’s best to book ahead. This can save you money, too. For example, the No1 Lounge in Gatwick’s North Terminal costs £32 per adult and £18 per child if booked online, but £40 and £20 respectively if you just turn up.

You can save even more money if you buy a pass via a cashback site such as Quidco.com or TopCashback.co.uk. At the time of writing, Quidco pays 11% cashback on No1 Lounge passes, bringing the cost at Gatwick down to £28.48, while TopCashback pays 11.55%. Other offers on Quidco include 10% cashback on Lounge Pass sales and 8% cashback on Executive Lounges.

Sites such as LoungePass.com and LoungeBuddy.co.uk are a great way to compare the different lounges at any airport you will be flying to, from or through.

Manchester aspire lounge.jpg

Manchester airport’s Aspire lounge (above)

“We provide customer reviews, photos, and other information to help travellers decide whether the lounge is right for them, whether they’re looking for a place to grab a bite, get some work done, relax, or all of the above,” says Brent Griffith, co-founder of LoungeBuddy.

“When you book lounge access with us, we save you a spot in the lounge so that you won’t be turned away. There are also certain lounges that you can purchase access to through LoungeBuddy that are not available to the general public elsewhere, such as the Lounge@B in Dubai and Lufthansa Business Lounges.”

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Deals for frequent flyers

Regular travellers should investigate annual membership. There are two main options here – an annual pass for a particular lounge brand or schemes offering access to multiple lounge brands.

Aspire Lounge annual membership costs £259.99 (via Executivelounges.com) for unlimited access to any participating Aspire or Swissport lounges in the UK, Canada, Denmark, and the Netherlands. A big advantage of Aspire Lounge membership is that you can bring a guest each time for free.

However, Priority Pass membership (via Prioritypass.com) will be a better option for many people. It offers access to more than 1,200 lounges in more than 500 cities across 130 countries. The lounges are run by various brands, including Plaza Premium and No1 Lounges.

Standard membership costs £69 a year but you have to pay £15 per lounge visit. Standard Plus is better value – for £159 a year you get 10 free visits. If that’s not enough, Prestige membership costs £259 and offers unlimited lounge visits. Members can take a guest each time for £15. However, simply having a pass doesn't guarantee entry – if the lounge is busy, for example, you can still be refused access. 

Jon White, director of marketing at Priority Pass’s parent company, Collinson, says that with individual lounge access costing up to £45 each time, frequent travellers can save money with annual membership.

“For example, our Priority Pass Standard Plus membership includes 10 free visits for a one-off cost of £159, which means you only need to make a couple of return trips each year to make it worthwhile,” he says, “With memberships, travellers are not only saving on lounge access – the selection of complimentary snacks and tipples available should be weighed up versus the cost of other food and beverage options in airports and transport hubs.”

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There are a couple of ways to get Priority Pass membership for free – but you’ll need to be pretty well off. Membership is included with the £28 a month NatWest Reward Black current account, but this requires a sole income of at least £100,000, a NatWest mortgage of £500,000, or £100,000 saved or invested with NatWest. American Express’s Platinum card includes Priority Pass membership alongside worldwide travel insurance and hotel benefits – but it comes with a hefty £450 annual fee.

DragonPass (via En.dragonpass.com.cn) combines lounge access with discounts on airport dining, limousines, and meet-and-greet services. It covers about 970 lounges and has three membership options with its top-tier deal costing US$399 (£278) and offering unlimited lounge visits.

Before you book lounge access, check it’s a lounge at the same terminal you’re departing from -– unless it is accessible landside (before security). Some of the larger airports with multiple terminals have several lounges in each terminal.

If you fancy a visit to the best airport lounge in the world, you’ll need to go all the way to Jamaica. Club Kingston, at Jamaica’s Kingston Norman Manley International Airport, was the overall winner of Priority Pass’s Lounge of the Year Awards 2017. The lounge features Jamaican artwork and décor, local food and drink, signature cocktails, a conference facility and dedicated work stations.

EMMA LUNN is a freelance journalist who writes regularly for Moneywise, the Independent and The Telegraph

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Fidelity Is Now Offering Zero-Fee Index Funds. Here’s How It’ll Make Money

Everyone should have at least one retirement account.

And you have a lot of options when deciding where to invest for retirement: 401(k)s, 403(b)s, traditional IRAs, Roth IRAs — all tax-advantaged accounts you can put mutual funds and exchange-traded funds in.

Unfortunately, that freedom can be paralyzing.

Many people can’t contribute more than a few hundred dollars per month, and with thousands of mutual funds and ETFs to choose from, sometimes it’s easier to just invest in a new car.

Well, Fidelity is trying to lower that barrier to entry for investors with something no major mutual fund company has ever done before.

On Friday, Aug. 3, Fidelity will begin offering two no-fee index funds with no minimum investment.

You’ll be able to invest in the Fidelity Zero Total Market Index Fund (FZROX) and Fidelity Zero International Index Fund (FZILX) with a zero expense ratio — the percentage of the fund that goes to fees associated with managing the fund — no account fees and no investment minimums.

These funds can go into a traditional or Roth IRA, 529 plan or any investment account when you purchase them through a Fidelity brokerage account.

Index mutual funds and ETFs are known for having the lowest fees in the investment world. Fidelity is just the first to cross the zero-fee finish line. Schwab’s lowest index funds have a 0.03% expense ratio, and Vanguard’s have a 0.04% ratio.

So you’d have to have a lot invested to see a significant difference.

How’s Fidelity Going to Make Money?

This looks like a classic “loss leader” strategy. A loss leader is a good or service that’s strategically sold at a loss to attract customers in hopes they’ll purchase other, more profitable products while they’re there.

Kind of like what MoviePass was (unsuccessfully) trying to do.

This is evidenced by the fact that Fidelity didn’t even let people take a breath before it also announced it’s dropping expense ratios on a number of other funds to as low as 0.015%.

Whether you stick with who you have or try out these new Fidelity funds, the most important takeaway is to consistently contribute to your retirement accounts. Lower fees typically translate to higher profits, but not if you don’t contribute.

This article contains general information and explains options you may have, but it is not intended to be investment advice or a personal recommendation. We can't personalize articles for our readers, so your situation may vary from the one discussed here. Please seek a licensed professional for tax advice, legal advice, financial planning advice or investment advice.

Jen Smith is a staff writer at The Penny Hoarder. She consistently invests in index funds and gives money-saving and debt-payoff tips on Instagram at @savingwithspunk.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

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Would a Shorter Work-Week, Same Pay, Work in the USA?

How would you like to work only 32 hours, four days a week instead of the traditional 40-hour, five-day work week and receive the same pay?A company in New Zealand—Perpetual Guardian tried it for two months and found that its employees were more productive and had more leisure time to enjoy a better quality of life with friends and family. 

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Financial Fruit: Apple Becomes 1st Trillion-Dollar Company

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Index Funds Can Help You Get Rich (but It’s Not Going to Happen Overnight)

The scariest part of investing isn’t wondering if you have enough money or watching your savings diminish.

It’s getting started.

When you don’t have a ton of money, it’s nerve-wracking to put it in a metaphorical shoebox that you can’t access for decades, even when everyone’s telling you now is the best time to start.

When my husband and I started thinking about retirement last year, we were in the same place.

We went searching for information and found that everyone who knows anything about investing has a strong opinion about it, regardless of how much they actually know.

The easiest and most common options in 401(k) plans and IRAs are mutual funds, but there are still a plethora of funds to choose from.

After talking to a number of investment professionals and personal finance writers, we found one type of investment that nobody had anything bad to say about: index funds.

What’s So Great About Low-Cost Index Funds?

An index fund is a type of mutual fund or exchange-traded fund (ETF) designed to track the performance of an index by including the same individual stocks as the index.

You may have heard of the S&P 500 or Dow Jones Industrial Average. Those are examples of indexes that index funds try to match.

For example, the S&P 500 includes 500 of the largest publicly traded companies America, so an S&P 500 index fund will have all 500 — give or take a few — of those companies’ stocks in it.  

People love index funds for two main reasons.

1. The fees are really low. The goal is to pay as little in investment fees as possible. Index funds have some of the lowest fees of any investment vehicle.

Robert Farrington from TheCollegeInvestor.com helps millennials navigate investing for the first time and loves index funds for that reason.

“One of the biggest things that erodes your investment gains is fees. The less fees, the more money you can keep in your pocket,” he said. “What many people don’t realize is that non-index funds can charge fees upward of 1% per year or more. Index funds can have fees as low as 0.03% per year — that’s a huge savings and simply equates to more money in your portfolio.”

And you’ve heard of Warren Buffett, right? That famous businessman who invests for a living and has a net worth of over $84 billion?

While Buffett actively invests in single stocks, for the average citizen who doesn’t enjoy reading about that stuff all day, he recommends low-cost index funds.

Because index funds aren’t actively managed, the fees associated with them are super low. With low fees, more of your money can compound interest compared to actively managed funds with higher fees.

Buffett actually bet $1 million that he was right — by pitting an index fund against a basket of hedge funds for 10 years — and won by a landslide.

2. They’re well-diversified. Erik Tozier, from The Mastermind Within, prefers index funds because they provide instant diversification for any portfolio size.

“It’s unfortunate, but it’s a fact that some companies will fail. It’s also a fact that some companies will outperform others,” he said. “Humans don’t have crystal balls, and to be able to select which ones will fail and which ones will perform well is nearly impossible.”

By having low-cost index funds, you own a little piece of a lot of companies, as opposed to an actively managed fund that typically includes fewer companies. So if one company fails, it’s backed up by many more successful companies. And on average, you’ll trend with whatever index your fund is tracking.

While some naysayers think index funds will kill the market, Camilo Maldonado of The Finance Twins said that index funds are still a small percentage of the overall stock market, and they’re likely to stay that way.

“Only about 40% of the stock market is owned by indexers, which is well below the 75-85% threshold that leading economists and investors, like Warren Buffett, warn against,” he said. “What this means is that investing in index funds will continue to be a viable investment for many years to come, since there's no certain indication that those levels will ever be reached. After all, there's always someone willing to bet that they can beat the market average.”

How to Invest in Index Funds

You can add index funds to almost any retirement or investment account. And because the funds are so broad, you don’t need many to diversify.

The easiest place to start is in your traditional or Roth IRA.

If you don’t already have one you can open an IRA brokerage account with a company like Vanguard, Charles Schwab, Fidelity or BlackRock. Each company has its own selection of index funds and minimum balances to open, so check each to find the company that’s right for you. You’ll want to look for fees that are less than 1%.

Your 401(k) may have more limited options.

Wherever you choose to put them, including low-cost index funds in your portfolio is likely to result in fewer fees flying out of your accounts and more money for you in retirement.

This article contains general information and explains options you may have, but it is not intended to be investment advice or a personal recommendation. We can't personalize articles for our readers, so your situation may vary from the one discussed here. Please seek a licensed professional for tax advice, legal advice, financial planning advice or investment advice.

Jen Smith is a staff writer at The Penny Hoarder and maxes out her 401(k) and Roth IRA contributions, all in index funds. She gives money saving and debt payoff tips on Instagram at @savingwithspunk.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

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The Wisdom of Frugality: The Environmentalist Case for Simple Living

This is the seventh entry in an eight-part weekly series that provides a detailed look at the book The Wisdom of Frugality by Emrys Westacott. If you’re new to the series, feel free to hop back to the first entry.

This chapter of The Wisdom of Frugality takes direct aim at one of the biggest benefits often cited for living a simpler frugal life: it’s environmentally friendly. A frugal person, as the argument goes, uses far less resources than an affluent person and thus puts less of a strain on the global environment. Many people carry this concept forward and use it as a big part of their moral justification for frugality.

Historical Background

This part might not seem relevant to frugality, but bear with it.

Prior to the Industrial Revolution, there was no need for people to be concerned about the environment. The individual actions of humans in a pre-industrial society did not add up to nearly enough to cause environmental damage on a scale that could consistently cause significant and widespread harm.

Nature was seen as a wild force for man to exploit. It was far beyond the ability of man to control it or interfere with it in any significant way; rather, man found ways to accentuate the benefits of nature and minimize the negative impact on human life.

Over the centuries, humans gradually developed technologies that allowed them to exploit more and more of the earth’s resources, eventually leading to the Industrial Revolution and widespread exploitation of those resources.

Alongside the Industrial Revolution, a backlash of sorts arose in the form of Romanticims, which lauded natural untamed landscapes and distrusted artificial things. This eventually developed into a broad tradition, with people like Henry David Thoreau rejecting many aspects of technology and eventually growing into the modern environmental and political movement.

The Environmentalist Argument for Frugality

Frugality and environmentalism find a great deal of overlap because of similarity in tactics. Both of them find a great deal of value in minimizing one’s use of the Earth’s resources and getting as much value as possible out of the resources that we do use.

The idea of “reduce, reuse, recycle,” for example, is as much at home with an environmentalist as it is with a frugal person. Both will seek to get as much value out of things as possible, but for somewhat different core reasons. The environmentalist wants to reuse and reduce in order to minimize their impact on the Earth, while the frugality wants to reduce and reuse in order to minimize the expense.

The specific tactics that both groups use in their daily life tend to match up really well, too. Strategies like using less water, consuming fewer manufactured goods, using less electricity, and finding low impact things to do with one’s time are strategies that both frugal people and environmentalists share, even though they may be doing those things for different reasons. Often, frugal people and environmentalists are on the same page with broader initiatives in the community, like having an effective mass transit system, which lowers overall environmental impact (great for the environmentalist) while also lowering individual cost (great for the frugal person).

Objections to the Environmental Argument

However, a great deal of synergy in tactics doesn’t add up to full agreement. While there may be some overlap between the beliefs and tactics of the environmentalist and the frugal person, there isn’t perfect alignment.

First of all, ecological impacts are often difficult to articulate and evaluate. Things like biofuels and rechargeable batteries might seem to be environmentally friendly on the surface, but the full picture of their environmental impact often isn’t nearly as clear cut. For example, rechargeable batteries often require some very environmentally unfriendly practices and materials requirements to manufacture, for example. They may be frugal, but are they environmentally friendly? It’s a bit harder to tell for sure.

This is true for larger strategies that might seem like great synergy between frugality and environmentalism. Is it more environmentally friendly to install solar panels on your home than to keep buying from the grid? What about the manufacture of those panels – what kind of impact does that have? Figuring that out becomes very difficult, whereas crunching the numbers to determine the cost-effectiveness of such a choice is much more cut and dried.

The thing to remember when being skeptical of ecological impacts of individual choices is that it’s good to be skeptical of the individual practices, but recognize that the overall principle – reduction of environmental impact – is a good one.

The second issue to consider is the fact that simple living isn’t always green living. A great example of this came from the “burn barrel” we had when I was growing up. We didn’t have trash service and the only real option for trash removal was to haul it to a dump that was many miles away, so instead we had a “burn barrel” – an old barrel that my dad picked up somewhere – in which we burnt our trash. When the barrel became full of ash (and with a few unburnt items in there), then we’d pay to have it hauled away. It was far cheaper than actually having trash service, but far less environmentally friendly.

In retrospect, the environmental cost of services out in the country where I grew up was much higher than it would have been in the city. The environmental cost of running power lines, water lines, roadways, and other such services to us out in the country was enormous. Furthermore, to have access to other services, like grocery stores, we had to drive quite a few miles.

The idea of “simple living in the country” is really only environmentally friendly if you decide to completely go without a lot of basic services. Some people in rural areas do eschew a few services that people in urban or suburban areas might expect (such as speedy internet), but people in rural areas do expect an awful lot of the basic services that all Americans expect, like drivable roads, drinkable water, and so on, and those services have a pretty big environmental footprint when they’re offered in rural areas.

Another great example of how the frugal option isn’t always the most environmentally friendly option is the choices faced when buying fresh produce. Local, organically produced items are going to have a lower environmental impact than produce that came from a factory farm several thousand miles away… but the local organic produce is going to be more expensive because the factory farm methods squeeze a lot of cost out of the system.

How does a person decide what the right choice really is? It’s not an easy decision no matter what you choose. There ends up being several reasonable choices when it comes down to balancing various environmental factors, and often the “best” choice ends up being influenced by other factors like health benefits, the impact on the local community, and so forth. Often, this best choice does not end up being the least expensive choice, which can put a price conscious person at odds with an environmentally focused person.

Furthermore, it can be argued that the choices of individuals make no real difference. The actions of governments and corporations will make the real difference, not individual frugal choices. The things I do in my daily life have very, very little impact on the environment compared to the impact of large scale agricultural businesses and manufacturing businesses.

This is the reasoning that many people use for individual poor behavior. “I can’t possibly make an impact,” goes the logic, “so it doesn’t matter what I do.” Thus, people excuse their own unethical and damaging behavior.

The thing is, individual actions multiplied many times can make an enormous difference. Consider, for example, a community that has limited water in its reservoir that agrees to some general water use rules within the town. If everyone chooses to conserve a little, everyone has enough water for their needs. An individual person isn’t going to be able to fix the water issue through severe cutbacks or non-use, nor is that individual going to be able to singlehandedly drain the reservoir, but when lots and lots of individuals agree to limit their water use to merely meet their needs rather than all of their wants, there ends up being enough water for everyone to meet their needs.

This pops up over and over again. When people agree to use restraint when utilizing common resources like water and wood and other such things, there’s enough for everyone to have their needs and sometimes their more important wants met. If individuals assume they have no impact and then uses the resources recklessly, then simple arrangements where everyone has their needs met can never occur and some will be left without needed resources.

When lots of people take little steps, economies of scale kick in. For example, if everyone in America gave a single dime toward a cause, that cause would suddenly have $30 million dollars. Little efforts are only small when they’re seen in isolation – if they’re repeated by everyone and looked at from a distance, they appear enormous.

Another counterpoint is the idea that our best hope for fixing the environment lies in technological innovation.. Many of the tools that we have for keeping our environment healthy come from technological innovation – solar panels (and their steady improvement), wind power, algae power, tidal power, tools for environmental cleanup, and so on. As powerful as frugal living can be, it can’t fix the damage of the past and it can only somewhat alter our trajectory going forward. Technology has the capacity to fix our past mistakes and radically alter our path going forward.

The problem is that technological innovation, as it’s happening, often has a huge environmental impact itself. It can take a ton of resources to go from whiteboard idea to something that works, and that first version that works is usually very rough and takes a long time to refine. In other words, development of the technologies that we really need to make things better is going to require some significant short term environmental impact, and there’s not even a guarantee that those technologies will help. Furthermore, other technological innovations will likely continue to increase our use of resources while we stumble towards any kind of solution to the environmental impact of that resource use.

Stepping up activities that are causing the problem is illogical. It’s the equivalent of eating more when you’ve just been given a prescription for diabetes medication. Yet it’s essentially a requirement if we believe technology will just fix everything.

Many people hope that this research will happen as a result of the economic booms that have come from the development of earlier research into high-demand products. The reality is that the kind of research that’s done in the wake of a successful product is usually not in solving big societal problems, but in developing a follow-up product. Apple’s R&D department didn’t start trying to solve humanity’s deep questions once they developed the iPhone. Instead, they went to work on the iPhone 2 and the iPad.

Final Thoughts

Most of the arguments that people make in favor of frugality are individual arguments. They look at things purely in terms of the individual – how can I get the most value out of this situation, considering my needs and wants and my financial bottom line? The environmental angle is an attempt to move beyond that individual approach. How does frugality come into alignment with larger societal needs? It happens to line up well with being green.

When you start looking at frugality through the lens of what our moral obligations to others actually are and how we live them out, it’s clear that frugality can be a major part in terms of living out our obligations to our community and the world. If we live a less expensive and simpler lifestyle, we’re left with more resources with which to use to make the world a better place, plus we’re consuming fewer resources ourselves. There are a lot of ways we can use those resources to make the community and the world a better place.

In short, frugality is a powerful supplement to a public service oriented lifestyle. If volunteerism and other forms of public service and public work are a major part of your life and you want to actively work to make the world a better place, then frugality plays a strong complementary role in that because it reduces the amount of time and energy and money you need to commit to meeting your living expenses, which thus increases the amount of time and energy and money you have available to commit to the causes you care about.

There’s another interesting underlying issue in all of this: just because something feels right doesn’t mean that it is right. It might feel “right” (for an example that hits home here in Iowa) to buy ethanol-supplemented fuels, but the significant reduction in fuel efficiency plus the environmental cost in the conversion of plant matter into ethanol means that I’m not convinced that what “feels” right actually “is” right (the jury is still out for me on this one, to tell the truth). It takes a lot of work to move from what “feels” right to what actually “is” right, and that sometimes means giving up on some tightly-held beliefs. That’s a kind of effort that’s in short supply in the world, sadly enough.

Next week, we’ll tie up this book with some final thoughts on the book as a whole and what it means for people practicing frugality today.

The Wisdom of Frugality Series:

• Part 1: What Is Simplicity?
• Part 2: Why Simple Living Is Supposed to Improve Us
• Part 3: Why Simple Living Is Thought to Make Us Happier
• Part 4: Why the Philosophy of Frugality Is a Hard Sell
• Part 5: The Pros and Cons of Extravagance
• Part 6: The Philosophy of Frugality in a Modern Economy

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Tame the Lifestyle Inflation Beast Now… or It Will Devour Every Extra Cent

As an entry-level newspaper reporter on a $28,000 salary, I drove an ugly Gumby-green Toyota Corolla with nearly 200,000 miles and just one hubcap. I ate a lot of macaroni and cheese. A couch wasn’t in my budget, so I plopped my brother’s old futon mattress on my living room floor.

I seldom had more than a few bucks left over from my paychecks, so I had no savings, but at least I wasn’t accruing more debt. If I budgeted properly, I’d even have enough for a couple rounds of drinks with friends.

But several years and salary bumps later, my savings remained paltry — and I was still driving the green machine. So where was my extra cash going?

Well, there was the extra $30 a month to have a washer and dryer in my apartment. And the furniture that I gradually put in said apartment. And the takeout food that I substituted for mac and cheese. And the gym membership upgrade. And the drinks with friends that evolved into dinner and drinks.

None of these upgrades sounded like a big deal. But combined, they added up to major lifestyle inflation, and they ate away my potential savings.

What Is Lifestyle Inflation, and When Is It Bad?

Lifestyle inflation, also known as lifestyle creep, happens when your spending increases as your income rises. It does not include those unavoidable increases in your cost of living, like a rent hike or a rise in grocery and gas prices.

Lifestyle inflation is a choice. It happens when you upgrade to a fancier car or apartment because you have more money to spend. Or you start dining out more or buying slightly pricier clothing.

The tricky thing about lifestyle inflation is that it isn’t inherently bad. Lifestyle inflation is the reason I’m not shopping at Forever 21 at age 35. It’s the reason I have a real couch now. It’s the reason I was able to take on a car payment and send my old Corolla to scrap-metal heaven.

The danger of lifestyle creep comes when you don’t have long-term goals. Without a plan, you’re more likely to spend extra money mindlessly. You’ll stay broke even as the numbers on your W-2 soar.

7 Ways to Avoid Lifestyle Inflation

The good news is, by establishing priorities and good habits now, you can fight excess lifestyle inflation later.

1. Learn to Live Within Your Means While You’re Still Broke

If you’re in college or working in a low-paying job, just being able to pay your bills without taking on more debt is a win. Focus on spending no more than you bring in, so your future earnings won’t be eaten up by debt payments.

You might be surprised by how much a little grocery strategery can save you on food. Making small changes at home can add up to huge savings on utility bills.

2. Create a Budget ASAP

Accounting for every dollar you spend now will help you make smart decisions about how to allocate extra money in the future. Are you a budgeting novice? It’s OK — this easy guide to budgeting will get you started.

3. Spend More Money (but Only in Your Head)

How would you spend an extra $5,000? Maybe you’d pay down student loans, save more for retirement or sock it away to use toward a down payment on a home.

Imagining how you’d spend cash you don’t actually have may sound like a futile exercise in daydreaming — but identifying what you want now will help you decide what long-term goals to focus on. And having goals will help you avoid mindless spending when you actually have more cash in hand.

4. Got a Raise? Congrats, but Figure Out What You’ll Actually See

OK, suppose that $5,000 raise becomes reality. Nice! But hold on before you pop open the bubbly. Do you know how much of that money you’ll actually see?

First, calculate how much extra you’ll pay in taxes. Pro tip: Figure out how much you’ll owe now if you don’t want to pay at tax time, and adjust your withholdings accordingly.

Next, account for inflation — the kind you can’t avoid. As of May, the 12-month inflation rate was 2.8% in the U.S. That means if you were earning $50,000 a year as of May 2017, on average you’d now have to earn $51,400 annually just to maintain your lifestyle.

Also, if you contribute a certain percentage of your salary to your 401(k), you’ll need to account for that.

Once you’ve determined how much extra money you’ll take home, you’ll have a realistic picture of how much extra you can spend.

5. Pretend That Raise Never Happened for Now

Sure, you could spend that extra money on a pricier apartment. And if that’s your long-term goal and you can afford it, go for it. But maybe your ultimate goal is to buy a house. That’s when you might want to keep up the frugal habits you developed when you were broke, so you can save the extra money for a down payment.

Avoiding lifestyle creep is especially important if you’ve got credit card debt or student loans. Putting extra money toward what you owe will have a huge payoff, because you’ll save on interest payments.

Stashing extra income in a retirement account now, instead of spending it, is also a great way to build wealth. For example, if you’re 20 years old and put $5,000 in a Roth IRA now, it could be worth $180,000 by the time you’re 65, even if you never contribute another cent.

6. Ignore What You See on Instagram

Scroll through Instagram and it seems like everyone else just bought a five-bedroom house and spends their weekends sunbathing on a yacht in Martinique. But sometimes, avoiding lifestyle inflation is as simple as focusing on your own goals and ignoring everyone else. You know your goals, your budget and your values. You never know whether there’s a financial mess behind the fabulous lives you see.

7. … but Treat Yourself (Within Reason)

Fighting lifestyle inflation doesn’t mean you never get to treat yourself. You’ve put in hard work to score those raises or earn extra income. So if you can afford it, go ahead and take a vacation or splurge on a piece of clothing occasionally. Celebrating the wins can keep you focused as you strive toward your goals.

When Is Lifestyle Inflation OK?

Like I’ve said, lifestyle inflation isn’t a bad thing when you have a long-term plan. Here are a few examples of when it makes sense to let your lifestyle inflate.

Your needs change: You don’t want to automatically start blowing extra money on rent just because you can afford to do so. But when your needs change — say, you’re preparing to start a family and need more space, or you have a new job that you want to live closer to — it’s reasonable to consider spending more.

You’re spending on a long-term goal: Remember when I told you to imagine how you’d spend money you don’t have? If you’ve finally saved enough money to make that happen, you have permission to stop daydreaming.

You’re investing in yourself: When spending extra can help your professional development, or it’ll make you happier and healthier in the long term, it’s worth considering. If you’re starting your first real job after college, it probably makes sense to invest in a real adult wardrobe. Taking on a car payment might make sense if driving an old, not-so-faithful car is a constant source of stress.

We’ll even give you a pass to order takeout or have your groceries delivered if that little bit of lifestyle inflation means you have extra time to invest in your side hustle.

Robin Hartill is a senior editor at The Penny Hoarder.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

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Secondhand Clothes from a Personal Stylist: I Tried ThredUP’s ‘Goody Box’ Service

Whether or not you enjoy shopping for clothes, sometimes a little assistance for time-saving or style-shifting purposes can be helpful. Until recently, companies that specialize in new apparel such as Stitch Fix and Nordstrom’s Trunk Club have cornered the online personal shopper market. The basic process works like this: You create a profile detailing your budget, style, and fit needs, and a stylist sends you a box full of clothing, accessories, and shoes for a fee. You choose the items you want to keep and send everything else back within a designated timeframe.

I’ve been intrigued by the concept, but as someone who keeps her wardrobe to a minimum, likes to host clothing swaps, and generally shops resale stores wherever possible to cut back on supporting the throw-away, fast-fashion industry, I’ve been hesitant to try such subscription crate services.

Enter ThredUP’s new customized “Goody Boxes,” and an excited me.

ThredUP’s Goody Box: New-to-me, just-for-me

ThredUP, the largest online thrift store, has been in the secondhand business for almost a decade. The company used to deal only in one-to-one buying and selling, but recently debuted its online customized curation program: the Goody Box. Instead of a getting a crate full of new clothes chosen by a personal stylist, you receive an array of custom-picked secondhand fashions.

The process will sound familiar. After setting up a profile, you have the opportunity to include additional notes to your stylist; I asked for no leather or fur, and wrote that I tend to wear a lot of black and would appreciate some bright color options. You can also share more details about your style by favoriting items currently available on the site, or by linking to a personal Pinterest board.

Right now, the fee for the service is $10, but it’s technically a non-refundable deposit: You receive $10 in credit toward whatever items you decide to keep. Once a box arrives at your doorstep, you have seven days to try everything on and return what you don’t want. ThredUP includes an itemized sheet that lists each piece and its price, along with a free USPS return label. They’ll also send you multiple reminder emails about the return deadline, so you don’t accidentally get stuck with everything if you don’t want to add all of it to your wardrobe.

I ordered my first box last month, and a second box immediately after receiving my first, and here’s what I found.You

You can get high-quality secondhand goods online.

My biggest worry about buying secondhand items online concerns quality. As a resale shopper, I’m used to rigorously checking every inch of each item I want to buy, and I still sometimes bring home pieces that are more used than I first expected.

And if I’m honest, while the ThredUP site is clean and user-friendly when it comes to filtering for sizes, colors, price, and the like, the photos of the clothing aren’t the most appealing. The clothing is secondhand… and it shows. It’s often floppy, wrinkled, and doesn’t quite fit the display mannequins. You only get two photos of each item, typically front and back, and the descriptions are fairly minimal.

However, all the clothing I received in my two Goody Boxes was in good shape — no tears, holes, stains, weird markings, or otherwise heavy use. A few items I received were brand new with the original tags still in place. I’ve also watched a handful of Goody Box unboxings online, and while some people had concerns with sizing and style, only one person complained about a quality issue. It’s given me more confidence in purchasing one-off resale items, at least from ThredUP.

I loved the element of surprise.

I don’t typically like a lot of surprises, but the possibility of finding something completely unexpected and perfect for me is one of the reasons I love resale shopping. Others may find digging through disorganized racks at their local Goodwill, Arc, or consignment shop tedious (like my husband), but the hunt has always been part of the appeal for me.

I was giddy when my Goody Box arrived, and I dove in with a treasure-hunting attitude. You can choose a theme for your box, such as “9 to 5 Styles,” “Take Me Out Outfits,” or “Tropical Getaway,” if you’d like a little more control, but you can also pick the “Just for You” custom mix and let your stylist go wild (or classic, or boho, or whatever you ask of them). As thredUP co-founder and CEO James Reinhart admits in a letter sent with my first box, “We know we won’t get it all right all the time,” but their mission is to “inspire a new generation of consumers to think secondhand first.”

When it came to my boxes, Reinhart’s quote hit it on the button. I did receive some of the brightly colored items I requested, but I also received two leather purses, a leather skirt, and a petite-size dress for my 5-foot 7-inch body. They went straight back into the box, and when they asked why I was returning these items, I made sure to let them know. (It is worth noting that a few weeks after giving this feedback to thredUP, the company sent me a “Second Chance” email. It explained that they had noticed I didn’t love many items in my box, and if I was willing, wanted to give me a deposit-free opportunity to try another. I get that they want to sell more product, but I did appreciate that someone noticed — and, of course, I said yes.)

The cost is low.

While ThredUP does charge that non-refundable, $10 upfront fee for its Goody Box service, you do get the 10 bucks back as a discount if you keep and spend at least that much on an item.

In the box, you get about 15 items in minimal packaging — each priced to fit the “ budget per item” cost you choose when you sign up. I selected the lowest possible, $20-$40, which seemed high to me, until I realized it’s really just a guide. About half of the designer label clothing and accessories I received came in around $12 an item. I felt like most of the prices were comparable to those I typically find at a locally owned boutique consignment shop I frequent.

A big cardboard box, cheery polka dot tissue paper, and some bubble wrap is the extent of what you’ll find around your nicely folded items — all of which you can reuse when packing up for returns. Shipping is free, as are returns, which are processed through the U.S. Postal Service. You’re not required to commit to a subscription plan, so you can order as many or as few times as you like, on your timeline.

Compared to Stitch Fix, which charges a creditable $20 stylist fee for items that average $55 apiece, or Trunk Club, which sends items in the $100-to-$300 range and charges a $25 creditable stylist fee, ThredUP’s Goody Boxes are a consignment-shop caliber bargain.

The impact is potentially high.

No, I don’t anticipate that a Goody Box will change your life. The impact I’m referring to here is the environmental one — which, of course, you can contribute to simply by buying secondhand locally or online. The Goody Boxes just offer another way to access the resale market and make an impact on the world around you.

“Fashion is the second-most polluting industry in the world surpassed only by petroleum,” wrote Emily Farra in Vogue last fall. “Basically, when you buy something old and previously-loved, you’re extending its lifespan and reducing its carbon footprint. Picking up brand-new clothes all the time (and disposing of them just as quickly) drives demand for nonstop manufacturing, which contributes to the fashion industry’s incredible waste.”

Cheers for more options.

Related Articles

• Here’s My Secret to Saving Money on Quality Clothes
• Some Thoughts on Subscription Crates and Monthly Delivery Clubs
• Five Reasons to Love a Clothing Swap (and How to Host Your Own)
• The Deceptively Tiny Wardrobe

The post Secondhand Clothes from a Personal Stylist: I Tried ThredUP’s ‘Goody Box’ Service appeared first on The Simple Dollar.

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