Money Management: Perhaps Not Luxury Goods

As we walk on the streets now, we see many people wearing or holding branded items. From Chanel handbags to Nike shoes, these products have become a norm in our daily lives. Have you stopped though to think if we might be paying too much for them? Is having branded luxury items a form of good money management? Here are some thoughts on why buying luxury items may not be your best choice when seeking to manage your finances well.

1. The high pricing 

While items from luxury brands increase your self esteem, it is undeniable that it burns a hole through our pocket. Luxury items have a high pricing but may not guarantee better quality. Luxury brands spend massive budgets on marketing so this means that the high price you pay may not be proportional to the quality of the product you receive.

2. There are always alternatives

You could argue that luxury items bring you joy but perhaps there are alternatives that could give you greater enjoyment with less cost. For example, you could indulge in a nice meal with your friends and family or invest in a hobby. These are things that could bring you happiness that you can also consider spending your money on rather than luxury goods.

3. It might not make you happy

Luxury items are thought to increase our self esteem as they are generally associated with status and wealth. However, it might also be lowering your happiness. In a recent study by Boston College and Harvard Business School, it was found that owning luxury items might make you feel inauthentic and an impostor in your own skin. The reason people felt uncomfortable was because the luxury product made them believe that it was ” a privilege which is undue and undeserved,” even if they could afford the product. 

Hopefully this article triggers some thoughts in you the next time you want to buy a branded item. For more money management tips, check out this article.