Lifestyle inflation kills freedom.

My hometown of Cleveland, Ohio, was just named "the most affordable city in the US to live comfortably" by Travel and Leisure.

You'd think that would mean life is easy for wealthy Clevelanders, but one of my high school friends makes $500K a year there and still feels trapped.

He's got two expensive cars, a giant house with a swimming pool, private school for his kids, and a country club membership. From the outside, this looks like the dream. But on the inside, it's a treadmill on a steep incline.

My friend, in his mid-forties, is struggling with the realization that none of this stuff is bringing him and his wife any of the freedom they expected for their earnings. And at this point, they don't see a way to slow down the spending.

Their choices have become sticky obligations to keep grinding for, and he hates this new "boss" of his life.

My friend doesn’t work for himself, but the lesson here applies to all of us, especially if you want to live your life with intention.

The moment you opt into new lifestyle benchmarks, you're setting a standard that you'll always feel the pressure to maintain. And, as you can see from my friend's story, those decisions can be the building blocks of a prison.

Because one day, when you don't want to work as hard, or you want to take a chance on something new, or maybe you just want to take some time off, you'll still have all these lifestyle benchmarks to keep up with (or eliminate, and that's hard too).

After chatting with my Cleveland buddy, I started revisiting a simple rule Jennifer and I learned when we got engaged.

The rule of three

If you've planned a wedding, you know how much pressure it creates. You can spend money on anything and everything, and the suggestions are endless. Literally, everyone has an opinion about what you need.

We were completely overwhelmed by all the "helpful tips," and we didn't see a way not to overspend.

But then some excellent advice came along just at the right time. Before we signed any big contracts, a colleague of Jennifer's shared some wedding wisdom with us that forever changed how we think about spending money. And now we use this rule all the time.

The advice was to pick the three things that matter most, and splurge on them. Get exactly what you want. And for everything else, be relatively frugal.

This framework came as a huge relief to us. It gave us permission to invest in the things we really cared about. But it also gave us the obligation to be serious about what didn't really matter.

When all was said and done, we had a wonderful wedding at a reasonable price. It was the best day of my life, even though there was no elaborate cake, Jenn's dress was inexpensive, and we didn't send people home with party favors.

The rule of three was so useful for wedding planning that we started using it for other things too.

The solopreneur money trap

As a solopreneur, lifestyle inflation is especially dangerous because income isn't guaranteed.

When you work for someone else, you might get a raise and upgrade your lifestyle accordingly, especially if you feel confident about your job security. But as a solopreneur or entrepreneur, your income can fluctuate wildly. So, if you've inflated your lifestyle across every category, you've created a financial floor you can't fall below without serious consequences.

I've watched people go from feeling free at $250K to feeling broke at $750K because they inflated their lifestyle across every category instead of being intentional about the categories that actually mattered.

So they become trapped by their own success. They can't take a month off. They can't turn down work they hate. And they can't experiment with new ideas that might not pay immediately.

What actually matters

Jennifer and I still use the rule of three, though we have to remind ourselves to stick to it when we see other entrepreneurs living differently.

Here are our current three important things that we make a conscious decision to invest in:

1. Travel without worrying about flight or hotel costs
2. Weekly massage therapy and a quality gym membership
3. A budget to eat at two higher-end restaurants each month

Everything else stays very basic. We’ve kept our housing costs low, drive a Subaru, buy a lot of our clothes from Target, and don’t own fancy watches or expensive jewelry.

Because freedom gives us something money can't buy: the option to say no to work I don't want, and the option to try things I enjoy, even if they don't make a lot of money.

How to choose your three

If you have a partner, include them in this exercise. This is 100% a teamwork thing.

Make a list of the things that genuinely improve your life. Try not to think about what you're supposed to want or what other people want.

Ask yourself this:

"If I can only splurge on three categories for the next 5-10 years of my life, what would they be?"

This isn't about what sounds impressive. The idea is to get down to three things that will actually support your happiness.

Three mistakes to avoid

1. Going over the limit: When you expand beyond three things, you're getting back to where you started, flexing for everything and feeling free to enjoy nothing.
2. Choosing splurging categories that sound impressive: Instead of identifying what actually makes you happy, personally, you choose what you think will impress other people.
3. Not being specific: "Looking good" is too broad and will lead to spending everywhere. "High-quality workout clothes and one professional wardrobe refresh per year" is specific and manageable.

The key here is to be brutally honest about what genuinely improves your happiness versus what you think you're supposed to want, do, or care about.

The bottom line

Lifestyle inflation will trap you if you let it spread everywhere. Successful entrepreneurs are especially susceptible to the dangers of it.

Success isn't about affording everything. It's about affording what matters most, and staying free enough to do work on your own terms.

Focusing on your three categories is a simple way to build the life you actually want and reduce your emotional response to temptations. Remember, the goal here is to hold on to that sweet freedom that made you want to be an entrepreneur in the first place.

And that’s all for today.

See you next week.

P.S. If you want to learn how I went from $0 to $10.2M in income and from 2,000 to 1.2M followers online in just 5.5 years (all while spending next to nothing), check out my flagship course, The Creator MBA.

It's helped over 6,000 people start their first online business from scratch.