The Hidden Threat to Contractor Success
Most contractors think the biggest threat to their business is slow seasons, bad employees, or cheap competitors. But the danger often comes from something far quieter and far more personal. It’s called lifestyle creep, and it can drain your financial future long before you see it coming. If you’ve ever upgraded your truck too fast or spent a big check before it hit the bank, this one’s for you.
Understanding Lifestyle Creep
Lifestyle creep occurs when an increase in income leads to an increase in discretionary spending. For contractors, this often means buying new trucks, bigger houses, or going on lavish vacations as soon as they land a big job. While these purchases may seem like rewards for hard work, they can quickly lead to financial instability.
Brad explains that many contractors come from humble beginnings and, upon experiencing a bit of success, feel the urge to upgrade their lifestyle. This can be exacerbated by social media influencers flaunting luxury items, creating a false sense of what success looks like. The reality is that many of these influencers are not as wealthy as they appear; they rent luxury items to project an image of success.
The Consequences of Lifestyle Creep
When contractors increase their lifestyle expenses based on short-term gains, they set themselves up for financial stress. Brad shares a common scenario: a contractor lands a big job, makes $20,000, and immediately spends it on a new truck or other luxuries. Then, if the next job results in a loss or if the phone stops ringing, they find themselves in financial trouble. The new truck payment becomes a burden, and the lack of savings means they have no cushion to fall back on.
Action Steps to Combat Lifestyle Creep
1. Pay Your Future Self First
One of the most effective ways to combat lifestyle creep is to pay your future self first. This means redirecting a portion of your income into savings or investments before it even hits your checking account. Brad suggests increasing automatic transfers to savings or investment accounts by a percentage that you won’t feel, such as 5-10%. Treat saving like a bill that must be paid each month. This approach helps build wealth quietly and ensures you have a financial cushion for lean times.
2. Adopt a 30-Day Delay on Purchases
Impulse buying is a significant contributor to lifestyle creep. Brad recommends adopting a 30-day delay on purchases. When you feel the urge to buy a new toy or luxury item, add it to a “wants list” on your phone. If you still want it after 30 days and it genuinely adds value to your life, buy it guilt-free. This delay helps remove the emotional impact of the purchase and allows you to make more rational financial decisions.
3. Upgrade Your Skills, Not Your Stuff
Instead of spending money on material items, invest in yourself. Use extra funds to upgrade your skills through coaching, certifications, or attending conferences. This investment in your personal and professional development can lead to higher earnings in the future. Brad emphasizes that upgrading your skills increases your self-value, which can translate into more significant financial gains over time.
Wealth isn’t built by how much you make but by how little you need to look successful. By paying your future self first, adopting a 30-day delay on purchases, and investing in your skills, you can avoid the pitfalls of lifestyle creep. Stay disciplined, stay hungry, and remember that true success doesn’t need to be flaunted with material possessions.
Resources
Grab Brad's tell-all book: The Contractor Profit Blueprint
