‘I am terrified’: Actress Sydney Sweeney might have a net worth of $40M but she says she’ll never be ‘comfortable’ — how to always feel financially secure (regardless of your bank balance)

The deaded lifestyle creep

As it turns out, Sweeney’s insecurities around finances is a relatively common issue for wealthy Americans.

According to a Northwestern Mutual Plannings & Progress study, 68% of high-net-worth Americans — those with $1 million or more in investable assets — don’t consider themselves wealthy.

Although Sweeney has made several big-ticket luxury purchases since skyrocketing to fame in recent years, she’s been relatively savvy in ensuring they were investments that can pay out in the long run — specifically by building out her real estate portfolio.

At the time of this writing, she owns a $3 million Tudor-style home in Los Angeles, a $6.2 million tear-down home in Brentwood, California, and an oceanfront property in Summerland Keys, Florida, for $13.5 million.

Of the tear-down home, Sweeney is keen to preserve its Old Hollywood heritage. “We’ll fix it up as much as we can without hurting any of it,” she said. “I don’t want anyone to walk in and be like, ‘Oh, when did you redo this?’ I want it to feel timeless, like it is.”

But where does someone draw the line between savvy investments and lifestyle creep? For example, to get around town, Sweeney drives a $70,000 sky-blue vintage Fiat Jolly.

Personal finance experts tend to agree that lifestyle creep is a common problem, even for the average American who doesn’t have millions of dollars to spend.

“Lifestyle creep — also known as lifestyle inflation — is the gradual increase in your discretionary spending as your income rises,” writes Erin Gobler, a Wisconsin-based personal finance writer.

While spending more on higher quality goods can be beneficial and even a wise investment, Gobler cautions people not to spend money simply because they have it.

Nearly half (49%) of Americans earning more than $100,000 say they are living paycheck to paycheck, according to MarketWatch.

“Studies have shown time after time that living paycheck to paycheck has very little to do with income levels but rather with spending levels,” Bobbi Rebell, founder of Financial Wellness Strategies, told MarketWatch.

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How to manage your money and avoid overspending

Lifestyle creep can be difficult to reverse, so many finance experts suggest getting ahead of the problem before it gets out of control.

The first step is understanding your current financial situation by examining your lifestyle and adhering to a customized budget.

Start by figuring out how much income you make each month and then break down how much you spend on average.

Be sure to include everything from rent or mortgage payments, utilities, internet, and memberships or subscriptions, as well as a list of any outstanding debts. There are several apps and online services that can assist with this.

A popular budgeting strategy is the 50/30/20 rule which breaks everything down into needs, wants, and savings/investments.

It breaks down as follows:

• 50% of your income is set aside for needs like housing, food, and transportation
• 30% is directed toward wants like dining out and hobbies
• The last 20% goes toward any savings and investments

Most finance experts will also recommend establishing an emergency fund. This will give you a safety net that you can tap into when unexpected expenses arise, such as a medical emergency or sudden home repair.

Hold yourself accountable by routinely scheduling progress reports with yourself. This can be as often as monthly or bi-monthly, or even annually. By keeping track of your money moves and revisiting ways you can curb your spending will only help you in the long run.

Finally, if you still find yourself struggling to control your spending impulses, consider recruiting a financial therapist, or any financial professional, to help you discover a healthy relationship with money.