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Identifying and Stopping Your Disguised Luxury Category - SimplisticSaving.com

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Identifying and Stopping Your Disguised Luxury Category

When you read the word “Luxury” what kinds of things immediately come to mind? Yachts, diamonds, private jets, private islands and other extravagances likely take shape in your mind’s eye.  All of these items are fine examples of luxury in celebrity terms.  The term luxury to the common man does not need to be quite as lavish.  The term luxury as I am addressing it concerns an item or service that is not a necessity.  Food is a necessity, but dining out is a luxury.  Clothing is a necessity, but $100 jeans are luxuries.

Looking over budgets of other people and examining my own spending habits I have picked up on a strange trend.  It seems like almost every person has at least one category where they are unfazed by their spending.  We all share a common category, in gasoline, that relates to my observation.  We can buy fuel efficient vehicles and change our driving habits, but ultimately when it’s time to fill up our gas tanks we pay whatever price is asked of us.  This is because gas is viewed primarily as a necessity.  In my family I have found this category is food.   I can go back and forth in an internal dilemma with myself before making a $15 purchase, but for some reason spending $15 on food never really phases me.  My wife has the same ability with food, but also has no trouble buying new clothes even when she would not spend otherwise.  Other people may smoke a pack of cigarettes every day, even though this is a $1,500 per year luxury they don’t even flinch.

The main point in finding these categories that you spend easily is to allow yourself to prevent unnecessary expenditures.  This is the category that needs more vigilance to keep expenses at bay.  Also, you can use these categories to buy other great things.  For instance, at one point I had a phone that would shut down, not get service much of the time and just be generally inefficient.  I wanted a new phone that was $250, but found the expense to be excessive.  Then I looked at my spending and realized that I could cut my food spending by $10 a day by eating at home more often.  After one month that would save me $300 compared to the previous month’s spending.  Even though each meal only lasted for a few minutes I had no problem spending that money, but a phone that I use everyday needed to be justified.

I try to evaluate what is important to me on a regular basis and can create short term goals for myself.  If I can cut these menial luxuries then I will have money to spend on the luxuries I really enjoy.  If I could save $10 on food or cigarettes I would have an extra $3,650 every year that I could put toward new phones, vacations or other aspects of life that are more fulfilling than spending money to fund bad habits.

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