By Mutunga Tobbias / The Common Pulse/latest news /US/ Kenya/Abroad/Africa / OCTOBER2025.
Financial discipline is a curious beast. When life is tight, when every shilling or dollar counts, we often develop a level of mindfulness around money that borders on the obsessive. We track expenses with meticulous care, prioritize needs over wants, negotiate relentlessly, and make difficult choices that prioritize long-term stability over immediate gratification. These habits, forged in the crucible of financial constraint, are often powerful and enduring. Yet, paradoxically, when income rises and financial pressures ease, many of us abandon these very habits, trading frugality for indulgence, prudence for impulsiveness, and mindfulness for carelessness. Understanding this phenomenon requires a dive into human psychology, societal pressures, and the subtle mechanics of wealth management.
At the heart of this paradox is a phenomenon economists and psychologists alike refer to as “lifestyle inflation.” As earnings increase, individuals naturally adjust their spending patterns upward, often in ways that mirror or surpass the rise in income. A small salary might inspire frugality because there is simply no alternative. Every purchase is weighted with consequence, every debt carries immediate risk, and every financial decision can trigger anxiety. When paychecks grow, however, the perceived cost of indulgence diminishes. A $50 dinner out that once seemed extravagant becomes a casual choice. A $5,000 car that would have seemed absurdly luxurious now feels justifiable. The constraints that once disciplined behavior disappear, and with them, the automatic practices of careful budgeting and thoughtful spending. This shift is rarely malicious or conscious; it is a natural human response to newfound freedom and perceived abundance.
Beyond lifestyle inflation, there is a psychological component tied to self-reward and social signaling. When we struggle financially, money is primarily a survival tool. Its purpose is practical: shelter, food, transportation, and security. We develop routines that are highly functional because necessity demands it. When those survival pressures ease, however, money begins to take on symbolic meaning. It becomes a marker of success, an expression of identity, and a vehicle for social comparison. Humans are inherently social creatures, and societal cues about success are rarely subtle. Friends, colleagues, and social media all contribute to an environment where spending is equated with status and achievement. Suddenly, the careful saving habits that once defined us feel less relevant, replaced by a drive to showcase prosperity. The same individual who clipped coupons and tracked every expense during lean times may now justify extravagant purchases as deserved rewards or markers of accomplishment. The habits formed in adversity are not erased, they are simply deprioritized in the face of new motivations.
This shift is also influenced by cognitive biases that distort our relationship with money. One such bias is the “hedonic treadmill,” the tendency for humans to quickly adapt to improvements in circumstances. A raise that once seemed life-changing may, within months, feel normal. The new level of income becomes the baseline, and satisfaction is deferred only to the next upgrade in lifestyle. This adaptation undermines the discipline cultivated in leaner times, because the financial edge that once prompted careful planning and saving becomes invisible. Another relevant bias is overconfidence, a subtle but powerful force. With more resources at their disposal, individuals often believe they can afford riskier choices, invest less cautiously, or spend more freely, assuming that higher earnings will always cover potential missteps. Overconfidence can erode the financial mindfulness that scarcity once enforced.
Interestingly, the very habits we abandon are often those most crucial to long-term wealth building. Saving consistently, avoiding unnecessary debt, tracking spending, and living below one’s means are timeless practices that compound benefits over years and decades. When these habits are abandoned, the short-term pleasures of a higher income can mask the long-term risks. This is why so many high earners struggle with financial insecurity despite impressive salaries. The illusion of abundance can lull people into spending patterns that ultimately mirror the struggles they once worked so hard to escape. Wealth without discipline can be as precarious as poverty without opportunity.
Another factor contributing to the erosion of good habits is social pressure and expectations. As income rises, expectations change. There is pressure to match the lifestyles of peers in similar financial brackets, to invest in appearances, and to participate in social rituals that were once unaffordable. These pressures can be subtle and insidious, often cloaked in the language of “deserving reward” or “treating yourself.” Over time, they reshape priorities and can erode the internal discipline that scarcity once demanded. This dynamic illustrates a tension between internal values and external influences, a tension that becomes increasingly relevant as wealth grows.
Education and financial literacy play a role as well. Many people develop financial discipline through necessity rather than instruction. Budgeting, tracking expenses, and prioritizing savings are learned behaviors born from constraint, not formal financial planning. When income rises, the informal scaffolding that previously structured decision-making is removed. Without a conscious framework for managing newfound resources, habits can dissolve. It is not enough to be frugal out of necessity; sustaining discipline requires intentionality, self-awareness, and planning. The failure to establish this intentional framework often leads to the abandonment of previously strong habits.
Psychological comfort is another subtle but potent factor. When money was scarce, financial discipline was reinforced by stress and urgency. There was a tangible consequence to overspending, a missed payment, an empty pantry, a debt that could not be deferred. Once these pressures are relieved, the emotional reinforcement that once guided behavior diminishes. Money becomes less of a source of anxiety and more of a tool for comfort, convenience, and pleasure. Habits that were reinforced by scarcity simply lose their urgency, and with it, their stickiness.
The implications of abandoning good financial habits are profound. Even modest increases in income can be offset, or more than offset, by increased spending, debt accumulation, and lifestyle inflation. This creates a paradox where higher earnings do not necessarily translate to greater financial security, and where the discipline that once enabled survival becomes undervalued. Over time, this can result in financial vulnerability, even for those who, on paper, earn significantly more than in the past. Ironically, it is often those who learned the most valuable lessons in hardship who are at the highest risk of losing their financial edge when constraints are lifted.
Breaking this cycle requires intentionality, self-awareness, and a proactive approach to money management. First, cultivating a conscious framework for financial decision-making is critical. This includes setting clear priorities, distinguishing between needs and wants, and maintaining consistent savings and investment practices regardless of income level. Second, recognizing and countering cognitive biases is essential. Acknowledging the hedonic treadmill, resisting overconfidence, and remaining mindful of social pressures can preserve discipline in the face of new wealth. Third, maintaining habits that were formed during lean times, tracking expenses, budgeting, and living below one’s means, serves as an anchor, keeping newfound income from undermining long-term security. Finally, cultivating a mindset that views money as a tool rather than a marker of identity or status can help prevent lifestyle inflation and maintain focus on sustainable financial growth.
In conclusion, the abandonment of good money habits as income rises is a complex interplay of psychology, social influence, cognitive bias, and human adaptation. Scarcity teaches discipline because every financial decision carries weight and consequence. Abundance, while liberating, can erode that discipline through lifestyle inflation, social pressures, and the diminished urgency that scarcity once enforced. The paradox is both fascinating and instructive: the very skills that allow survival under constraint are often devalued when prosperity arrives. Recognizing this dynamic, consciously maintaining disciplined practices, and cultivating financial mindfulness can bridge the gap between temporary comfort and lasting wealth. True financial freedom is not merely a function of income; it is a reflection of the habits, mindset, and intentional choices that persist when money flows more freely than it once did. By understanding the forces that undermine good habits and actively countering them, individuals can ensure that the wisdom forged in lean times continues to guide them, creating stability, security, and lasting prosperity long after the struggles have passed.
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