If you want to buy a £5,000 watch or sign up to an £60 per month mobile phone contract to get the latest must have smartphone, then that is your business. You don’t have to tell me, yourself or anyone else that you ‘need’ the items you buy. Logical justification is not necessary you only get one shot at this life and having nice things because you derive some form of pleasure or enjoyment from them is completely natural and not something that requires any form of logical justification.
However, in order to buy these luxury items you are ALWAYS giving something else up. This can be a tricky concept but bear with me for a moment. We all spend every penny we earn! That’s a big statement and I’m sure you’re thinking immediately that you don’t you put money into your pension, your ISAs, investments and savings accounts each month, and I’m sure you do BUT you are spending every penny. By putting money into pensions, ISAs, Investments and savings you are buying a more secure future, and education for your kids and food, heat and shelter for yourself in retirement. Even if you just leave some money in your current account you are buying an emergency fund in case you need it! So you see we all spend every penny we earn one way or another.
So when you decide to treat yourself to a luxury item over a cheaper model, or the latest and greatest gadget because you simply want it, don’t create logical justifications for yourself about why you want or need it or why it is a good decision.
Instead think about what you are giving up to pay for it. If buying the £5000 watch means that you have to keep your current car an extra year or two, then so what! If that smartphone contract means that you are going to drop your Sky TV package then who cares, but if it means you're going to be have less money for food and heat in retirement or your kids can’t go to University, or you can’t afford quality insurance to ensure if something happens to you your family are properly looked after then is the price of what you’re giving up too high? It’s your life only you can really decide if the give up is worth the pleasure you will get.
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