Life's Little Luxuries

[ljbab728]

This is an interesting article about what people will or won't give up in times of economic uncertainties.

Americans say they won't give up life's little luxuries | News OK

I agree about internet, cell phone, and cable TV. I could certainly live without those but don't want to. I also will keep buying my scotch and traveling. Something that is not important to me at all is a high end automobile.

What do other OKCTALK posters consider important luxuries or throwaways?

[Just the facts]

I am willing to give it all up except for two things - I would keep the internet and a cell phone but that wouldn't stop me from dropping my current providers or seeking out less expensive alternatives. Other than those, there is no amount of personal spending reductions that I would be unwilling to make right now.

[BBatesokc]

The problem is.... one person's 'luxury' is another's 'necessity' and often what some people classify as a 'luxury' I wouldn't.

Do you define 'luxury' as a non-essential item? In that case, virtually everything is a luxury. All we really need is a very small place to live that can be climate controlled and food and clothing.

Or, is a luxury based on price? In that case, I no longer consider cell phones and home Internet service a luxury as they can be had at a very low cost.

Things I define as luxuries are.... expensive cars (say over $15,000), jewelry over $200, a home over $150,000, vacations to tourist destinations or out of country, fine dinning, education at a prestigious college, designer clothing at retail prices, expensive electronics (computer, large TV's), and even to some extent unnecessary cable subscriptions, etc.

Also, it comes down to disposable income. I know people who consider going to the movies a luxury because they simply don't have the extra money. I also know people who can afford anything they want, so virtually nothing they spend money on do they consider a luxury.

I've learned TV is not that big of a deal to me. We once that we HAD to have cable and DVR - we've since learned we don't even miss them. In my younger days I often bought brand new cars - wouldn't even consider it today.

[ShiroiHikari]

I suppose it depends on your point of view. I would consider buying a new car every five years a "luxury". Also "real" jewelry and designer clothing and handbags. Even the "discounted" handbags at TJ Maxx still cost like a hundred bucks. Forget that! I have lots of other uses for a hundred bucks.

I also consider being able to dress nice something of a luxury, since it can get real expensive real fast. Problem is, it's hard to find things on sale that you like that also fit properly. In order to get exactly what you want, you often have to be able to buy something as soon as you see it on the rack, which sometimes means you end up paying $60 or more for a blouse. And if you try to wait for a sale, all those people with more money than you will buy them all at full price and there will be none left. Also, if you're like me and pants are never the proper length, you have to go pay someone to get them hemmed (or judge whether or not a sewing machine is worth the investment). So I just have to shop very smart and very infrequently and take really good care of the clothes I do have.

I consider having my nails done by a professional to be a luxury, since I can file, shape, and polish them myself for next to nothing. Also, high-end makeup. I've learned that most of that stuff isn't worth the hefty price tag (though some of it certainly is). A lot of drugstore products get the job done just as well for a fraction of the price. Then again, I suppose some people would consider makeup a luxury in and of itself.

Another thing I would consider a luxury is being able to decorate your home like a picture in a magazine. I don't bother buying home decor items anymore since nobody ever comes over anyway and I get tired of looking at the stuff after a couple of years.

[NoOkie]

For me, it comes down to three things: Air Conditioning, Internet access and the good toilet paper.

I've never bought the cheap TP, even when I was broke.

[Roger S]

For me, it comes down to three things: Air Conditioning, Internet access and the good toilet paper.

I've never bought the cheap TP, even when I was broke.

Amen on the good toilet paper!!!

I could happily drop off the grid as long as I knew I had a life time supply of good TP.

[OKCisOK4me]

I can't remember the last time I bought new clothes. If I do, it's a shirt here, a pair of pants or jeans there. I don't know how some people can be addicted to that kind of thing. Wear your clothes til they get holes in them & considering that some come with holes in them already, you should be good to go for years...unless you gain or lose a lot of weight.

I also consider a house a luxury. Even though I have lots of friends, at heart, I'm a loner. I don't need the room, I don't need extra room. I don't need the headache involved with owning a house. My 500sf studio is fine with me.

Cell phone, internet, Netflix, over-the-air HDTV. I'm good right there.

I just recently purchased a new car but considering I don't have many if any other luxuries, I'm happy to have just this one.

[PennyQuilts]

I'd never buy a new car, even if I had a money tree. But I'm not giving up a car. Not going to Disneyland/Disneyworld. I'd give up cable, but would rather hang onto the internet and my cellphone so I can facetime with my kids. The house is paid for but if I was starting out, I would get less than I could afford and pay it off ASAP. Being well off is a lot more about having few expenses than it is having lots of income. I spent the first 2/3rds of my life in debt and it was so stressful. Once I reached a point where I decided I wouldn't carry debt, my life got astronomically better even though I hardly spend any money. I spend less than a poor college student creeping by but live tons better. I couldn't do that if I still had kids living at home.

[OKCisOK4me]

I could totally see you teaching a class on how not to spend money.

I only bought a new car cause I wrecked my old one and since my friend is a salesman at Edmond Hyundai and I really like the new Veloster and he was gonna hook me up with a great deal and the works, I went that route. Had I had no friend that I told I was gonna come see when the time came, then I would definitely have gone used again and I will most likely do so next time. Here's to driving this car for 15 years! lol

[BBatesokc]

I'd never buy a new car, even if I had a money tree. But I'm not giving up a car. Not going to Disneyland/Disneyworld. I'd give up cable, but would rather hang onto the internet and my cellphone so I can facetime with my kids. The house is paid for but if I was starting out, I would get less than I could afford and pay it off ASAP. Being well off is a lot more about having few expenses than it is having lots of income. I spent the first 2/3rds of my life in debt and it was so stressful. Once I reached a point where I decided I wouldn't carry debt, my life got astronomically better even though I hardly spend any money. I spend less than a poor college student creeping by but live tons better. I couldn't do that if I still had kids living at home.

I hear ya there. When I met my wife (1998), I was single, in my 20's and living large in a nice rented condo, brand new 3000GT Spider and spending money like nobody's business. She said if she was going to marry me all that had to stop. No balances on credit cards, no cars newer than 4 years old, no bank loans for anything other than a house (cars had to be paid for in cash) and no expensive home. Basically she insisted we live below our means and put 20% of everything we make into investments/retirement. I'm so glad I was willing to listen to her (I guess females are more mature than males). It has taken all the stress out of our lives and allowed us to make a really big down payment on a new home and indulge on one 10 day vacation a year out of the country (Just got back from diving in Belize). I agree, being 'well off' is all about financial security - regardless of where on the income totem pole you reside.

Every high school student should have a semester of a Dave Ramsey type economics class, it would have saved me a ton.

[PennyQuilts]

Smart woman. Smart man to snatch her up!

[BoulderSooner]

I hear ya there. When I met my wife (1998), I was single, in my 20's and living large in a nice rented condo, brand new 3000GT Spider and spending money like nobody's business. She said if she was going to marry me all that had to stop. No balances on credit cards, no cars newer than 4 years old, no bank loans for anything other than a house (cars had to be paid for in cash) and no expensive home. Basically she insisted we live below our means and put 20% of everything we make into investments/retirement. I'm so glad I was willing to listen to her (I guess females are more mature than males). It has taken all the stress out of our lives and allowed us to make a really big down payment on a new home and indulge on one 10 day vacation a year out of the country (Just got back from diving in Belize). I agree, being 'well off' is all about financial security - regardless of where on the income totem pole you reside.

Every high school student should have a semester of a Dave Ramsey type economics class, it would have saved me a ton.

dave ramsey is massive over kill for any one with self discipline

using leverage is one of the only ways to generate wealth not retirement but actual wealth ..

[BBatesokc]

dave ramsey is massive over kill for any one with self discipline

using leverage is one of the only ways to generate wealth not retirement but actual wealth ..

No idea how anyone would label responsible personal finance as "massive over kill" - especially when we live in a society where a huge percentage of our population does little or nothing to limit debt or plan for the future.

'Self Discipline' is a characteristic not often found in a society of obesity, debt, underachievement, etc.

I'll take 'mass over kill' over the 'norm' any day.

[BoulderSooner]

No idea how anyone would label responsible personal finance as "massive over kill" - especially when we live in a society where a huge percentage of our population does little or nothing to limit debt or plan for the future.

'Self Discipline' is a characteristic not often found in a society of obesity, debt, underachievement, etc.

I'll take 'mass over kill' over the 'norm' any day.

i idea that borrowing is bad as a general rule is just not accurate

or the idea that you should pay off your house as soon as possible when money is "cheap" with rates at record lows .. or the idea that cars should be cash only when you can get a 0% interest loan or a sub 4% loan for a used car are crazy when you can make double or triple those rates investing in the market

why let someone else make money off of your money? make the money yourself .

[SoonerDave]

i idea that borrowing is bad as a general rule is just not accurate

or the idea that you should pay off your house as soon as possible when money is "cheap" with rates at record lows .. or the idea that cars should be cash only when you can get a 0% interest loan or a sub 4% loan for a used car are crazy when you can make double or triple those rates investing in the market

why let someone else make money off of your money? make the money yourself .

So you're saying that 8-12% returns are easy to come by in today's market? Please let me know how I can get in on some of that. Somehow, my 401k at work doesn't have the "Easy 8-12% Return Fund" as an investment option. Considering, too, that there are those of us who aren't entirely sold that the current market's level are sustainable, and would rather not find themselves on the wrong end of a 5-8% correction.

And I thoroughly advocate paying off a house as early as possible. Yes, with low inflation, you're paying off early with cheap dollars, but it's also arguably the lowest-risk, easiest return anyone can make, as your effective return is the rate of your mortgage. Why would I drop a couple hundred into my .5% passbook when I can put that against my 3.875% mortgage? The latter isn't a great return, but it's a darned site better than .5%, and entails exactly zero risk. And it puts me just that many more days closer to having zero house payment. I'm all over that, and I'm hopefully about 2.5 years from paying our house off. Maybe a bit sooner.

Now, I will concur that some of Ramsay's notions are over the top. And I also understand that, to a degree, they're over the top purposely, to get people out of the condition that perpetuates four-figure balances on multiple credit cards. And I agree, to a point, with Ramsay's notion that banks et al "sell" debt as a means to a "better" lifestyle to a public that doesn't understand just how dangerous debt can be.

A few years ago, the idea of buying a used car rather than new was very sensible planning. I did it successfully, and saved quite a bit on the first "minivan" our family needed. Seven years later, when that vehicle finally had expired, I started the process again - but this time, the used market had changed drastically. Those deals where someone else had paid the "drive-off depreciation" weren't out there. The vans I'd looked for, over a period of several weeks/months, were only tiny fractions off full retail, or a small percentage off brand new vehicles - with no warranty. I lost track of how many weekends we looked at replacements and found vehicle after vehicle in really marginal condition with no warranty, but commanding a premium. And I quickly realized buying used, in that case, didn't make sense. So I bought new, had the benefit of a full warranty, and now, five years later, that car now sits in my garage, fully paid off, and I don't think we've seen even half its probable lifespan.

All that is to say rules of thumb are good, but must be balanced by at least a degree of common sense and the benefit of personal experience. I, for one, look forward to having my house paid off, and having zero debt on the books.

[PennyQuilts]

I think until you get debt free, you just don't understand. You think it doesn't cost all that much to borrow at low rates and that "your" money should be working for you - the end result being that you have more money AND a house, etc. I get the logic, I get the theory but I also get the reality, having lived it.

All the money in the markets "building up" because you haven't locked it into paying off a house sounds good, on paper. Mainly, you just invest it and hope the stock market improves. Some people use it to flip houses. I've got a family member who works 24/7, is deep in debt (on purpose) because she sees that as a way to build wealth, struggles to save and thinks I am out of my mind for locking up my money by paying off property and staying out of debt. She'll be working until she is dead. She sees wealth in terms of income rather than assets. To her, assets are primarily useful because you can sell them to create income/revenue. I have found that income means little unless it is overwhelming higher than your expenses. Assets dramatically lower your expenses so you need much less income to be well off. Further, you are far more fluid in being able to take advantage of opportunities to save money/make money that come your way. I've known a number of - literally - millionaire junk dealers/salvage operators whose houses, vehicles and cars are well maintained and paid for and they carry a wad of cash on them in case they happen upon a good deal. Their children - to a man - attend private schools and they pay cash for their tuition. Check out some of the more affluent asian immigrants and see how they manage their money. They don't stick it in the stock market and hope it grows while taking out big mortgages, however low the rates.

If I don't have a house payment/rental payment, I can take that $2,000 a month of MY money and do a ton of things with it that saves me money - buy in bulk, improve my property, buy more property, get a small business off the ground, pay cash for another car if that comes up, etc. If I have children at home or need to care for older relatives, that $2,000 goes tons further than having to hire child care or adult care. If you don't have high expenses, you have more to work with - often in thousands - each month. The freedom and lack of stress is amazing.

[BoulderSooner]

So you're saying that 8-12% returns are easy to come by in today's market? Please let me know how I can get in on some of that. Somehow, my 401k at work doesn't have the "Easy 8-12% Return Fund" as an investment option. Considering, too, that there are those of us who aren't entirely sold that the current market's level are sustainable, and would rather not find themselves on the wrong end of a 5-8% correction.

And I thoroughly advocate paying off a house as early as possible. Yes, with low inflation, you're paying off early with cheap dollars, but it's also arguably the lowest-risk, easiest return anyone can make, as your effective return is the rate of your mortgage. Why would I drop a couple hundred into my .5% passbook when I can put that against my 3.875% mortgage? The latter isn't a great return, but it's a darned site better than .5%, and entails exactly zero risk. And it puts me just that many more days closer to having zero house payment. I'm all over that, and I'm hopefully about 2.5 years from paying our house off. Maybe a bit sooner.

Now, I will concur that some of Ramsay's notions are over the top. And I also understand that, to a degree, they're over the top purposely, to get people out of the condition that perpetuates four-figure balances on multiple credit cards. And I agree, to a point, with Ramsay's notion that banks et al "sell" debt as a means to a "better" lifestyle to a public that doesn't understand just how dangerous debt can be.

A few years ago, the idea of buying a used car rather than new was very sensible planning. I did it successfully, and saved quite a bit on the first "minivan" our family needed. Seven years later, when that vehicle finally had expired, I started the process again - but this time, the used market had changed drastically. Those deals where someone else had paid the "drive-off depreciation" weren't out there. The vans I'd looked for, over a period of several weeks/months, were only tiny fractions off full retail, or a small percentage off brand new vehicles - with no warranty. I lost track of how many weekends we looked at replacements and found vehicle after vehicle in really marginal condition with no warranty, but commanding a premium. And I quickly realized buying used, in that case, didn't make sense. So I bought new, had the benefit of a full warranty, and now, five years later, that car now sits in my garage, fully paid off, and I don't think we've seen even half its probable lifespan.

All that is to say rules of thumb are good, but must be balanced by at least a degree of common sense and the benefit of personal experience. I, for one, look forward to having my house paid off, and having zero debt on the books.

never said it was "easy" to get those returns in the short term .. but over a 30 year horizon yes 8% is pretty "easy" to achieve in the market

but other wise i pretty much agree with you ..

[metro]

I am willing to give it all up except for two things - I would keep the internet and a cell phone but that wouldn't stop me from dropping my current providers or seeking out less expensive alternatives. Other than those, there is no amount of personal spending reductions that I would be unwilling to make right now.

The problem is.... one person's 'luxury' is another's 'necessity' and often what some people classify as a 'luxury' I wouldn't.

Do you define 'luxury' as a non-essential item? In that case, virtually everything is a luxury. All we really need is a very small place to live that can be climate controlled and food and clothing.

Or, is a luxury based on price? In that case, I no longer consider cell phones and home Internet service a luxury as they can be had at a very low cost.

Things I define as luxuries are.... expensive cars (say over $15,000), jewelry over $200, a home over $150,000, vacations to tourist destinations or out of country, fine dinning, education at a prestigious college, designer clothing at retail prices, expensive electronics (computer, large TV's), and even to some extent unnecessary cable subscriptions, etc.

Also, it comes down to disposable income. I know people who consider going to the movies a luxury because they simply don't have the extra money. I also know people who can afford anything they want, so virtually nothing they spend money on do they consider a luxury.

I've learned TV is not that big of a deal to me. We once that we HAD to have cable and DVR - we've since learned we don't even miss them. In my younger days I often bought brand new cars - wouldn't even consider it today.

For me, it comes down to three things: Air Conditioning, Internet access and the good toilet paper.

I've never bought the cheap TP, even when I was broke.

THIS. I haven't had cable or an extra car in several years and haven't looked back since. Just need a reliable car (paid in cash), safe and climate controlled place to live, and TP.

[Matt]

THIS. I haven't had cable or an extra car in several years and haven't looked back since. Just need a reliable car (paid in cash), safe and climate controlled place to live, and TP.

I don't need any of that stuff. I don't need anything! Except an ashtray. And that's the only thing I need.

[OKCisOK4me]

I don't need any of that stuff. I don't need anything! Except an ashtray. And that's the only thing I need.

I hope that ashtray is at least 2-ply

[Buffalo Bill]

I don't need any of that stuff. I don't need anything! Except an ashtray. And that's the only thing I need.

I love that movie.

The Jerk - All I Need - YouTube

[BBatesokc]

i idea that borrowing is bad as a general rule is just not accurate

or the idea that you should pay off your house as soon as possible when money is "cheap" with rates at record lows .. or the idea that cars should be cash only when you can get a 0% interest loan or a sub 4% loan for a used car are crazy when you can make double or triple those rates investing in the market

why let someone else make money off of your money? make the money yourself .

We may be talking about two different things. I'm talking about personal finance and making mature and deliberate decisions to insure financial security not 'wealth.' 'Wealth' is rarely achieved through personal finance (IMO when referring to the general population). Wealth (defined as millions of dollars readily available IMO) is usually the result of business decisions and I agree that smart business often entails risk, loans, luck, etc.

But, like I said, I'm talking about personal finance and financial security - a much more realistic and achievable goal for most people. Basically - what to do with your pay check - not how to run your business.

That said, IMO as a general rule, borrowing is not advisable for most transactions. Not borrowing is the only guarantee of no debt and there is a immeasurable amount of security in not having debt.

Eliminate a house payment, car payment and credit car debt, and the average person can live without much income at all.

Even at record low interest rates, if you take 30 years to pay off your house, you're still giving away an incredible amount of money. The house I just bought only required 5% down with a conventional loan (even with keeping my current home) because my wife and I's credit score and income-to-debt ratio is very low. However, we chose to put down far more than that. Even at that we will be making double or triple payments and save over $100,000 in interest and cut our mortgage down to about 9 years - you call these low rates 'cheap money' - I don't call $100,000 cheap at all. Had we made the minimum payments we would have paid around $130,000 in interest alone.

0% interest on an overpriced new car (or anything else) that loses up to 40% of its value in the first 5 years is also not a smart financial decision IMO. I've yet to own a car in the last 10 years that I didn't make money on or lose no more than $2,000 on.

We also invest our money, but there are no guarantees that that money will make us money and when/if it does, that is long term. We all know jobs can be taken away, injuries can happen and investments can tank. The only constant that has security is the lack of debt (and education). Don't get into debt and you can handle or ride out most of life's most troublesome obstacles.

Call it 'massive overkill' if you want - but I call it being fiscally responsible.