I haven’t made very many “luxury” purchases so far in my life, but since paying off my student loans, I have decided that occasionally treating myself is something that I’d like to do. For me, these purchases will likely fall under fashion and travel, but for you it could be some high end snowboarding gear or an expensive camera or TV. “Luxury” is pretty relative, depending on your lifestyle.
I’m lucky enough to have a little bit of disposable income, but it’s not enough to make the process of saving for a $500+ purchase fast or easy (let alone a $1,000+ purchase). If you fall in the same boat then I think some of the tips I’ve been using on how to save for luxury items may be helpful for you too:
How to Save for Luxury Items
Get Really Clear About What You Want
Doing your research is really important before making a big purchase. You’d be surprised how many pairs of shoes I think I want until I try them on and find out that they are either outrageously uncomfortable or make me look like a clown (size 10 ladies, holla at me). I would definitely recommend seeing the item in person to examine it/try it on before purchasing. Does that little rectangle of Gucci fabric still wow you when you’re holding it in your hands? Does it seem durable? Is it going to stain easily? Is it going to last you multiple seasons? Does it fit all your stuff? Is it comfortable on your shoulder? Does it go with most, if not all, of your wardrobe? Would you feel comfortable wearing it every day? Is it still worth a whopping $1,500 considering the answers to all of those questions? If I’m going to save for luxury items, they have to check all of the boxes; form and function, people. Otherwise it’s not worth the price tag for me. Simple as that.
With travel, this is a bit different. I would recommend researching exactly where you want to go, how you’re going to get there, where you’re going to stay, what you want to do, and even where you want to eat. It’s a lot of work, but it will give you a realistic number to save for the trip. Keeping an eye on currency conversions is also necessary. You don’t want to spend all that money, only to realize you can’t afford to do the things you wanted once you get there. Or worse, finding out about an attraction you really want to visit after you’ve already returned from your trip.
Repeatedly doing luxury recon has not only narrowed down my wish list of purchases to something that feels more doable. It also taught me that that initial ping of oh my god those shoes, I NEED THEM when scrolling through Instagram is not necessary. After all, probably 90% of the time I decide that the item is not worth my money.
Set up a Savings Plan
I set up separate savings accounts at my bank for larger purchases and travel. Keeping the money separate helps me ensure that it will actually be spent on its intended purpose. I don’t know about you, but extra money in my checking account makes me feel a little too liberated when I walk into Sephora, and putting the money in my regular savings account almost always makes me feel guilty for withdrawing it to spend on a material good or temporary experience. I don’t know why my instinct is to not let myself have the things that I want, but that seems like a whole other blog post.
Right now, I have $50 per paycheck automatically transferring into each of these accounts. In theory, that would give me $1,200 a year towards larger purchases and travel, respectively. Depending on how you slice it, that could be a few pairs of shoes, or the majority of a handbag, plus a decently affordable trip to Europe or a few weekend getaways. It’s a plan that I just started this year, but so far, so good.
Obviously, this number can vary quite a bit. Even for me, it hasn’t always been this high and there have been some months I had to pause the automatic transfer due to unforeseen expenses. Everyone is different, but as long as you’re putting a priority on yourself, your well being, and your future first, there’s nothing wrong with saving a little off the top when you can for something you’ve decided is worth your money.
Stop Spending Just Because
If you’ve tried setting aside some savings every month, but almost always find yourself withdrawing the money because you need it for something else, then you might want to take a look at your current spending habits. I’m not talking about reasonable, emergency expenses like a car repair or emergency medical bill; that happens to everyone. But if you’re in the “oh crap, my rent is due and my checking account is $100 bucks short” cycle, then chances are you are over spending in at least one category. You’d be surprised how easy it is to go overboard, especially when socializing.
Say you go to the beach for a day with your friends but don’t pack any food. You all grab coffee and breakfast sandwiches on the way there, you pay for parking, you buy over priced hot dogs, chips, and lemonades for lunch, you buy another bottle of water to stay hydrated, and then you find a place for dinner before driving home. A night out full of Ubers and cocktails would be another example. And a movie, plus snacks, plus popping into Sephora with your friend would be another. If you’re doing this multiple times a month, or even as frequently as multiple times a week, it really adds up. I know that’s totally cliche financial advice, but it’s true. Eating before hand, packing a lunch, and pregaming at your place could make a big difference in your bottom line.
Also, just because your friend needs to stop at the drug store to pick up some more mascara, doesn’t mean you need to buy a lipstick just because you’re standing in the makeup aisle. When I was in high school and went to the mall with my friends, I would buy a soft pretzel if I didn’t find anything to buy. It was like a consolation prize to help me feel like I hadn’t gone for nothing, but now I would much rather go and come back with nothing than go and spend $8 on food that makes me feel like crap when I have perfectly good leftovers at home.
So those are my tips on how to save for luxury items. Hopefully you found them helpful! Please let me know if you have any of your own in the comments =)
Please keep in mind that I shared some real numbers with you in this post, because I think that a real life comparison is valuable to readers. I’m not trying to brag, or show off, or anything like that. I just know that when I read articles like this, I get annoyed when there are no numbers that I can use to compare myself to. Every person’s income, expenses, and spending priorities are different, but learning how others earn, spend, and prioritize their money can help us develop our own financial game plans.