How To Have A Lavish Lifestyle Without Breaking The Bank

Posted: 28 Jul 2011 04:00 AM PDT

When people say they want the good life, what most of them really mean is the luxuries life. Tempted by thoughts of first-class travel and sandy beaches, they move heaven and earth to get there—only to drown in debt down the road, their Prada purses overflowing with maxed-out credit cards.

You see, the high life is all about the money. You blow $1,000 on a hand-painted Hermès scarf not because it's pretty, comfortable, or valuable, but because you can. On the other hand, someone who's living the good life enjoys the finer things in life, prices notwithstanding. He or she can take as much pleasure in feel of real Italian leather and Egyptian cotton as with a $2 cup of coffee from that shop across the office. That's what makes the difference.

Luxury, to those who have it, is seldom what the magazines make it out to be. Anyone can live well without massive spending or borrowing. Read on to find out how.

The Luxury Life

photo credit: Damian Morys Foto

Be Honest With Your Wants

One thing smart spenders have in common is that they're honest with themselves. They're attracted to expensive things like any other person, but they're able to admit when they want something only because it's expensive. If a price tag makes you think twice, ask yourself three questions:

1) Do you need it now?

2) Will you still need/want it next month? Next year? Five years from now?

3) If yes, can you find something similar for less?

The ten minutes you take to answer these questions—as honestly as you can—may make all the difference between a smart choice and an expensive mistake.

Make a list of things you have to have, your non-negotiables. For some people it may be a comfortable bed; for others it may be good coffee every morning or traveling at least once a year. These are the things you should invest in. You won't feel bad about spending hard-earned money on them because you know you're paying for your own happiness, not a status.

Indulge in groceries

Ever wondered why you'd think twice about a $15 steak at the butcher's, yet gladly pay twice as much at a restaurant? People raise their guard at groceries because they're careful not to let everything add up. Well, restaurant bills add up to a whole lot more—we just don't notice because we consider it an "occasional" treat. Next time you hit the market, go for the finest cheeses and chocolates, the freshest produce, the best coffee. It's only a few extra dollars, and it'll water down your taste for expensive restaurants.

Size down

Economist E.F. Schumacher once said, "Any intelligent fool can make things bigger, more complex, and more violent. It takes a touch of genius… to move in the opposite direction." In this age of widespread urbanization and overcrowding, these words ring exceptionally true. Surround yourself with just the essentials, and free up financial room to splurge on quality.

Start with your home. Experts agree that all you really need is enough space to move around comfortably, with a bit of wiggle room. Fill a small space with good furniture, good art, good food—all the things you love, without the burden of a hefty mortgage, property taxes, and lawns that need mowing.

Travel more

A smaller home will leave you with more liquid funds—and time—to spend on things you enjoy. Most couples have to postpone travel plans to retire, get new furniture, or renovate the bathroom, but without a big space to worry about, you can pack up and leave anytime. Don't be afraid to spend part of your savings on travel. It's the kind of thing you never lose. Designer bags get stolen, fancy gadgets conk out, but a good experience stays with you forever.

You don't have to go far, either. There may be things to discover even a few blocks down the road—a quick Internet search can give you a few pointers. If you need a real getaway, book a trip off-season to save on airfare. Eat at a few well-recommended restaurants and buy the rest of your food from the local market. Leaving for a few weeks? Consider renting an apartment or condo instead of booking a hotel.

Invest in quality clothing

A full closet doesn't equate to luxury, especially if it's filled with $10 polyester shirts that last a dozen washes. Sometimes it does make sense to pay more for things you'll keep forever. Instead of stocking up on sweaters every year, save up for a few classic, well-made pieces that you can use ten years from now. Buy a good leather briefcase that you'll never have to replace, comfortable shoes that go with everything, a warm coat that will live through a hundred winters. They don't have to be designer. They don't even have to come from a store. Lasting quality is always well worth your money, whether it cost you $30 or $30,000.

That said, it won't hurt to bargain-shop, especially if you're looking into high-end brands. Indeed, it doesn't make sense to pay retail for designer gear when a bit of research can get you much better prices. Scope out designer sample sales and befriend local distributors so you'll get first dibs. The most well-connected can get their stuff straight from French fashion houses for up to 70% off!

Pamper yourself

Treat yourself to an hour-long massage, a facial, a pedicure, or a hair treatment. Spend a day at the spa, if you have the time. Don't wait for the stress to pile up—make it a regular affair. Work your favorite treatment session into your budget and schedule, whether it's once a week or once a month. With a bit of planning, you can easily trade a couple of restaurant meals for a spa session. The prices are about the same, and it'll give you more room to appreciate the life you're building. After all, if there's one rule to good living, it's that relaxing shouldn't be a luxury; it should be the standard.

Ally is part of the team that manages Best Credit Cards, a free balance transfer cards and no annual fee credit cards comparison service in Australia. Before joining BCC, she was a Media Planner with McCann Worldgroup Philippines, Inc., with award-winning executions, including the Levi’s 501 “Live Unbuttoned” global campaign.

Dollar Matters: Save Your Money!

Posted: 27 Jul 2011 08:50 AM PDT

With concerns about the possibility of being plunged into another recession — or even a depression — if the U.S. defaults on its debt, many people are increasing their savings plans. We saw an increase in the savings rate during the recession, but things have been changing lately. However, with the prospect of another financial disaster looming, it is reasonable to think that it’s time to get back to the good habit of saving money. Here are some great posts on keeping what’s yours:

6 Ways to Save on Back-to-School Basics

Linsey here are Financial Highway offers some insights into saving money on your school supplies. Get some great tips on saving on what your kids need come fall.

Ways To Save Inside Your Tax Free Savings Account

Echo at Boomer & Echo can help you figure out how to improve the way you save money with the help of your TFSA. A helpful look at different savings strategies with a tax advantage.

How the new PRPP should work?

Jim at Group Benefits Online takes a look at the framework for the PRPP. He provides an overview of how it should work, and how it might benefit you.

How To Save Money

Mike at Debt Free Adventure! provides a look at how to save money. It’s time to get back to basics and make a solid plan for saving your money the smart way.

Gradual Frugality: Finding Enjoyment in Saving Money

Leo at Consumerism Commentary knows that cutting everything out of your life at once can be too challenging. However, you can implement frugality a little bit at a time and then learn how to enjoy saving your money.

Use These Tips to Save on Your Next Prescription

Jon at Free Money Wisdom takes a look at how you can avoid paying too much in prescriptions. Want to save on your next trip to the drug store? Try these great ideas.

Teaching Your Children About Saving Money

Over at Moneyed Up, you can learn more about how to teach your children to save. Get them to develop the habit early on, and they will have more financial success later in life.

What is a Roth 401(k) And What Are Some Of The Benefits?

Peter at Bible Money Matters takes a look at the Roth 401(k). If you’ve maxed out your Roth IRA, it might be a good time to look into this relatively new retirement savings option.

Life Insurance Blog