Q: I’ve recently landed a better-paying job and I can now afford the occasional (and not-so-occasional) luxury, but I’m wondering if I should indulge. Am I better off living beneath my means to avoid falling prey to the trap of luxury? Is there a safe way to enjoy the more comfortable lifestyle that I can now afford?
A: It’s commendable that you’re taking the time to think through your spending choices instead of just mindlessly upgrading your lifestyle with your income. Let’s take a deeper look at the nature of luxury so you can make an informed decision.
What is luxury?
There is no universal answer to this question. According to the dictionary, luxury is defined as opulence, but what is a luxury for one person is a want for another, and a need for yet another. The blog, Mr. Money Mustache, a proponent of the super-simple living trend, suggests thinking on a global level for putting luxury into perspective. In many third-world countries, the conveniences we enjoy, such as running water and insulated homes, are genuine luxuries. Similarly, our great-grandparents might consider central AC units a luxury item.
For most of us, though, a luxury represents a purchase or an experience that is beyond our reach. Perhaps its most important feature is that it is never static; luxury is a constantly moving target.
How is luxury like a drug?
A closer look at luxury reveals that it has many significant similarities to drugs.
Every addictive drug, whether it’s caffeine, heroin or painkillers, provides a rush – and that rush is always temporary. Once your body gets used to the drug, you’ll need a bigger fix to provide the same thrill.
Likewise, a luxury purchase gives you an intoxicating feeling for just a short while. As soon as you grow accustomed to the luxury item, it no longer holds that same excitement or thrill. Soon after that, the luxury becomes a necessity, just another line on your monthly budget. Once that happens, you may subconsciously start looking for your next luxury item to pursue.
Luxury doesn’t only provide temporary excitement, but it’s also incredibly addictive. We get so used to our comfortable conveniences that we constantly seek more, until we’ve reached a point where we can’t live without all our stuff. And once we’ve grown accustomed to a certain standard of living, “detoxing” can be truly painful.
If you’d like to indulge
Before upgrading your lifestyle, first make sure you are maxing out your contributions to your retirement accounts. You can also put a little more into your Money One Federal Credit Union Savings Account each month for an investment that will last a lot longer than that bling you’ve been drooling over.
Once your savings are well-fed and you can still afford to indulge in the occasional luxury, tread carefully. Here are a few tips to ensure you don’t go overboard:
- Choose the luxuries that are most important to you. There’s nothing wrong with enjoying an occasional steakhouse dinner or indulging in a six-dollar cup of coffee a few times a week if your budget won’t feel the strain. What’s not OK is allowing yourself carte blanche on all luxuries. Spend some time choosing what is most important to you, whether that means a dream vacation twice a year, designer jeans, a new and expensive handbag each season or something entirely different.
- Budget for your personal luxuries. Even millionaires need to be mindful about how they spend their money. Make sure to work your luxury purchases into your monthly budget.
- Acknowledge when a purchase or experience is a luxury. One of the most important ways you can curb an addiction to the finer things in life is to know when you are indulging in a luxury purchase. This way, it won’t automatically turn into a habit.
- Recognize that it won’t bring you true happiness. Before indulging in a luxury purchase, make sure you recognize that it won’t lead to inner contentment. Remember that the high you’ll experience when using your new possession is temporary.
- Choose value over flashiness. When picking the luxuries you’d like to indulge in, try to choose products where price affects quality. Most designer clothing is not much more durable or better-made than similar products that cost half the price. Sometimes, though, especially when it comes to electronics and furniture, a pricier item means one that will last longer.
Simple living is wonderful for those who can hack it, but not all of us can. If you can afford the occasional luxury, and you take the necessary precautions to prevent yourself from going overboard, you can indulge guilt-free.
Your Turn: Do you think luxury is truly addictive? Share your thoughts with us in the comments.