Part of having money is all the fun that comes with buying luxury goods. If you’ve built a great nest egg, what’s the harm in splurging?
Experts say this is a no-no unless you have $50,000 in savings.
“We see many clients struggling to buy expensive toys before building savings,” said David L. Blaine, CFA, CEO of BlueSky Wealth Advisors. I’ve come,” he said. “A person splurged on a luxury sports car, but after changing jobs he was unable to pay it off. Despite his high income, the cost of the debt left little in his life goals. After selling the car and paying off the loan. , I was able to build an emergency fund and start a family.”
Mafe Aklad, a financial expert and general manager of Coupon Snake, offered similar advice. “Undoubtedly, it can be hard to resist the urge to buy luxury goods, especially when you feel like you’ve lived the good life and have earned the right to splurge a little on something new and luxurious. that’s right.”
But if you have less than $50,000 in savings, she says it’s not financially wise to splurge on these luxury brands and luxury items.
“Not only because doing so will inevitably slow down your financial progress and delay your financial goals, but also because it’s important to be aware of and guard against bad spending habits, especially when you’re in the early stages of your financial journey. Because it is important.”
Here are some luxury items you shouldn’t splurge on before you have $50,000 in savings.
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designer clothes
Don’t splurge on designer clothes until you have $50,000 in savings, says Melanie Masson, an insurance financial expert.
“Designer clothing can cost thousands of dollars, but you can find quality camouflage for less than $100,” Masson said. “Until you have enough money for emergencies and enough to contribute to your retirement investments, your clothing should be practical.”
See more: 7 small luxuries to buy at Marshalls this fall
luxury car
“The most expensive car on the market isn’t necessarily the most wallet-friendly,” Aklad says. “Especially maintenance and insurance costs. This is why splurging on a luxury car is a terrible idea when you have less than $50,000 in savings.”
Blaine agreed that luxury cars should be avoided. “Emergencies like job loss, health problems, and family crises can take a devastating toll on your financial cushion. Patience and practicality pay off. Build an emergency fund and reward it responsibly. Please allocate it to gold.”
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designer handbags
According to Aklad, the biggest reason you shouldn’t spend money on designer handbags when you have less than $50,000 in savings is that the more you spend, the more you still want to buy (feel the need for). This is because there is a possibility of getting stuck.
“In fact, they are so sumptuous and exquisite that no matter how much you eat them, you almost never get tired of them,” Aklad said.
In addition to being very expensive, there’s also the fact that there are new designs every season, which can ultimately deviate from financial goals, she said. As your sense of need and desire becomes blurred, you may find yourself prioritizing the frivolities instead of focusing on building future wealth.
latest smartphone
Another item Aklad says you shouldn’t splurge on until you have at least $50,000 in savings is a new smartphone.
“Frankly, when you think about how careful brands are in marketing their high-end smartphones and making them appealing to their audiences, it’s hard to imagine all the perks and unique and innovative features that are readily available to them once they decide to do so. It can be difficult not to be blindsided by the features that come with splurging on a smartphone.
She pointed out that if you don’t have up to $50,000 in savings and decide to splurge on the latest smartphone this year given market conditions, there’s no guarantee you won’t get caught up in this never-ending cycle. .
“There are always new models coming out every year. If there’s one thing these brands are good at, it’s that they can convince you that your current smartphone is far inferior to what they currently offer. “Let them do it,” Akrad said.
smart appliance
“Don’t splurge on smart appliances until you have $50,000 in the bank,” Masson warned. “Smart appliances may be fun, but smart refrigerators won’t store food better than standard ones, and smart ovens won’t cook better meals.”
Once you have enough savings, you can start splurging on things that aren’t practical, she said.
ATVs, dirt bikes, boats
Another “never do” is splurging on an ATV, dirt bike or boat until you have at least $50,000 in savings, Masson said.
“These toys are a lot of fun, but they cost a lot of money to buy, they depreciate more than you appreciate, and they can be expensive to keep in good condition.”
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This article originally appeared on GOBankingRates.com: 6 luxury items you shouldn’t buy yourself before you have $50,000 in savings
