The Truth About Financial Choices When You Love Luxury

We all make financial choices on a daily basis. Sometimes, it is the little things that we decide on that lead to our success or to our ruin.

It is easy to say that you need to make better decisions about your personal finances. Doing it is another matter. Some people are more inclined to make the right choices because of the lifestyle that they have chosen to live. If you notice, there are people who can easily stick to a frugal budget because their goals in life can be met by a frugal lifestyle.

But that is not entirely true for everyone. There are those of us who would love to stop spending but our happiness is just not met in that manner. There are people who want to make the right financial choices but end up spending a lot on our credit cards. But it is just not as easy to do as the others.

Here’s the dilemma: what if you love expensive things? What if your happiness is influenced by the amount that you are spending? People say that we need to follow our hearts. We need to pursue whatever it is that will make us happy because that is what will make our life worth living.

If your happiness is based on the amount of money that you are spending, how can you make the right financial choices? If you know in your heart that spending on expensive things make you feel good about yourself, then how can you keep yourself from eventually destroying your personal finances?

After all, when we find ourselves unable to pay for the things that we want to buy, we opt to use credit. The more we use credit, the more dangerous it is for our financial future.

According to an article published on Investopedia.com, researchers found that buying luxury goods make people feel good about themselves. It helps boost their self-esteem. The article further discussed that people who are in poverty or forced to live from paycheck to paycheck feel a significant increase in their self-esteem when they are able to buy a luxury good.

This explains why some people find themselves in a positive emotional high whenever they buy something expensive. It is probably hinged on the fact that a significant amount of purchasing power makes us feel invincible. As materialistic as that may sound, this is expected because we were born and raised in a consumerist society. We need to buy in order to survive. The more buying power you have, the more significant and accomplished you feel.

While this may explain why some people find happiness in buying expensive items, that does not make it right. Now that we understand why it happens, we can work on making better financial choices that will improve our personal financial situation.

How can you make the right choices if you love the high life

Don’t get us wrong. Buying and using credit not bad. However, relying on buying expensive items to make yourself happy is a recipe for disaster. We naturally gravitate towards what will make us happy. If buying makes you happy, you would naturally want to do it over and over again. That is where the problem starts. You have to think about what that happiness is doing to your future. It is the same as anyone battling an addiction. Using drugs or drinking too much alcohol may cause you to feel high or happy – but it is not really healthy for your future. This type of happiness is destroying your future.

Although your preference for expensive items may not be as threatening as being an alcoholic or a drug addict, that does not mean it is safe. It can lead to a lot of problems in the future. Even those who have a lot of money do not spend recklessly. In fact, their spending choices are the reason that they stay rich. They spend – but there is a reason for every expense.

That is what you should consider every time you get the urge to buy something. You can spend – as long as it is within the limits of your financial capabilities. As long as your spending is not compromising your future, you can spend as much as you want. But if you are using debt to pay for the expensive items that you believe will make you happy, then you need to stop to ponder about the financial habits that you are applying in your life.

Making the right financial choices when you know that you prefer to live the high life may be difficult – but it is not impossible. Here are a couple of tips that you can follow.

Start by changing your mindset. It is all about your mindset. Your belief that the price tag is important – that is a lie. Your life should stop being defined by the amount that you are spending. Even if you can afford it, you have to change this mindset because it is really very shallow. There are mindsets that can keep you from improving your finances – this is one of them. You have to know that there are alternatives to what makes you happy – and some of them do not have to cost a lot of money.

List what honestly makes you happy and find an economic way to enjoy them. Do you love to shop for clothes? Are you happy when you go out at night to party with your friends? Do you feel an emotional high when you travel? These all cost money and if you can no longer afford this lifestyle, you simply have to look deeper to check how these events really make you happy. If you love shopping for clothes, maybe it is looking good that really makes you happy. If you love going out, maybe it is the company of people that makes you happy. If you remove the spending – do you think these will still make you happy? In most cases, it would. If you hanging out with friends make you happy, invite them over or schedule a get together in one of their houses. It is the company that makes you happy anyway. It should not matter where you are.  Think about the non-financial aspect of the activities you love to do and that should help you identify what really makes you happy. Finding the frugal way to have fun is not impossible. You just have to really creative and you should understand what it is that you want.

Trim the still expensive list. There may be items on your list that does not have an economic alternative. That is alright. But that does not mean you should blindly spend on them. Know how much you can really afford and compromise. You can either cut back on spending for all of the items on your list. Instead of going out every other night, do it once a week. Instead of traveling every month, do it twice a year. Or you can give up some of the items on your list that you can live without. Gradually remove them from your life so you can focus your financial resources on the things that really matter to you.

Different ways frugality can make you feel rich

If you want to make right financial choices but you are hindered by your love for expensive expenses, learning about frugality can really help you adopt the right mindset. Being frugal is not about restricting yourself. It is not about deprivation either.

Frugality helps you identify the things that really make you happy and encourages you to focus your limited resources on them. You will let go of those that you do not need – or at least, you will only get what you need to survive. For instance, if you love to spend your time outdoors, you may want to live in a tiny house. That way, you do not have to saddle yourself with huge mortgages. You want to spend your time outdoors anyway. What do you need a big house for?

It is this mindset that will eventually help you make the right financial choices. If you do it correctly, frugality can make you feel rich. Here are the two ways that this can happen.

It allows you to free money in order to make it grow significantly.

Since frugality encourages you to stop spending on the expenses that are not important to you, it is easier for you to free money to invest. According to an article from TheSimpleDollar.com, frugality itself will not make you rich. However, it will increase the possibility that you will get rich. For instance, if you keep yourself from getting a mortgage because you decided to downsize your house, you can use the money saved to invest. That will help grow your money.

It teaches you how to enjoy what you love – without necessarily spending.

In an article published on GetRichSlowly.org, the author discussed the philosophy of Todd Tresidder, a financial coach who made most of his money on smart investments. He said that he was able to invest because he saved 70% of his income. How did he save it? He said that he blamed it on his values. Although his mother told him to go buy himself expensive items, he knew in his heart that he does not need them. He loved recreational activities. He avoided buying a Corvette and opted to just enjoy playing volleyball on the beach or ride his mountain bike in the hills. That made him happy and that is what he spent money on – and only when necessary.

As you can see, the proper application of frugality can really help you make the right financial choices. You may love the expensive lifestyle but if you concentrate on what matters the most, you will realize that the expenses are actually very shallow and superficial. Eventually, you will learn to let go of these and start making the right choices that will lead you to real financial abundance.