How to Spend on Luxuries And Still Save A Lot of Money

Do You Enjoy Life’s Luxuries? Me Too.

Though I run a personal finance blog that discusses strategies for budgeting, saving and investing, I am by no means the type of person who preaches complete minimalism and shunning away all of the finer things in life. As with almost all aspects in life, there is a balance that should be reached. Just as it is best to find a balance between working 16 hour days and watching TV all day, eating only kale smoothies or only McDonald’s, there is also a balance between a lifestyle of overspending and excessive debt versus complete minimalism and frugality.

The majority of activities I enjoy are either free or come at a low cost. Hiking, cooking at home, working out at the beach and reading are all activities I do because I enjoy them, and also because they help me to maintain a low spending lifestyle that allows me to save money. However, I also happen to enjoy fine dining and traveling. Two activities that at first glance are not what you would associate with someone who saves 40-50% of his income every month. The main reason that I am able to enjoy these activities while also maintaining my budget is that I am very much in tune with my values.

“Don’t tell me what you value, show me your budget, and I’ll tell you what you value.”
― Joe Biden

Throughout my adult life, I’ve learned to determine which values are most important to me and what I need to turn my focus away from in order to gain more out from how I spend money. Building on the examples I mentioned before, I’ve come to realize that traveling and fine dining are two things that I truly value and that the costs of these experiences are worth it to me. But at the same time, I’ve learned that designer clothes, electronics and new cars are things that I do not value and their costs are not worth it. When you know what you value, it becomes easy to learn how to spend your money in a way that will help you maximize value.

How I Can Spend “A Lot” of Money On Travel and Food But Still Hit My Savings Goals

Enjoying an edible balloon at Alinea in Chicago

This past year, my girlfriend and I celebrated our 3-year anniversary by going to one of the best restaurants in Sydney (Where we currently live. We are originally from Chicago). Tetsuya’s is a Japanese fusion restaurant with a focus on seafood. After 10 courses, including 3 desserts and a bottle of wine, I can honestly say it was one of the best meals of my life. However, it did come with a price tag of $500. I’m sure you’re all thinking it, “$500 for one meal?!?” But I can tell you it was absolutely worth it because I’m in tune with what I value. I get stressed out about buying an $80 pair of shoes, but I have no problem with a $500 meal for an anniversary.

Now don’t forgot that I’m still strict about my savings goals, so if I’m spending $500 on a meal then I will still pay myself first and find a way to make my budget work. The rest of the month, I only ate at a restaurant if it was absolutely necessary and kept it to budget-friendly places only. Then during the entire year of 2016, I didn’t buy any new clothes or electronics. That $500 bill was almost half of my discretionary spending for the entire month, and I was till able to save 40% of my income.

My strategy is to ask myself what I value (food, travel, etc.) and what I don’t value (new cars, clothes, electronics), and then include my values in my budget. I set aside some money for nice restaurants every month and also for a couple trips each year. This year we already went to Fiji, and we will be going to New Zealand in a few months. I have already taken into account the costs of these trips into my budgets for each month so I have been saving up for them all year.

Why It’s OK

Life is to be enjoyed. It’s important to make sure you’re saving money each month and not racking up debt, but each day is not guaranteed, so it is also important to take time to enjoy life’s luxuries every once in awhile. You just need to find that balance between hitting your personal finance goals and spending money on those activities that you value.

Would love to hear how you are reaching your savings goals and still enjoying life. Leave a comment or send me an email!

– NYPFGuy