What is Luxury?

Financial Autonomy - Blog
What is Luxury?

I came across a great story recently that got me thinking. A successful woman in her 50s observed that several of her younger colleagues at work, all in their 20s, were furnishing very expensive handbags. She realised that she’d never had a luxury item like that, and if these young folk could afford one, then surely after all these years of work, she could too. She mentioned this to a few friends, and they were all encouraging – splash out, enjoy yourself, you’ve earned it.

She had a look around and found a Chanel bag that was to her liking. Apparently she even needed to make an appointment to buy the bag. But when the time came to hand over the credit card and make the purchase, she pulled back. She couldn’t bring herself to do it. Spending thousands of dollars on a status symbol just wasn’t something that she could do.

This week I wanted to explore the idea of luxury, particularly as it pertains to financial autonomy. Once you’ve got yourself into a financially secure position, what use do you put that to?



Financial Security


Having a buffer of cash in the bank has to be at the top of the luxury list. Financial security is a wonderful thing. Knowing that if the fridge dies, the car needs a new set of tyres, or something happens to your health that requires considerable out of pocket expense, you have the money sitting there easily available to pay whatever is required. What a luxury!

An extension of this might be insurances, things like income protection and life insurance. They provide a financial safety net and so add to your financial security and peace of mind.

Being debt free, or at least having your debt well under control, takes a lot of weight and pressure off your shoulders. It certainly helps afford the luxury of sleeping easy at night.

Holding some investments that could be easily liquidated if needed take you one step further. If you reached a point where your employment was making you miserable, the knowledge that you could hand in your resignation, sell some investments, and have the time to re-calibrate and get yourself on a fresh path, is a luxury that would be extremely hard to put a dollar figure on.


No need to track every dollar


If you’ve had a chance to read my Financial Autonomy book you’ll know that one of the first chapters is around cash flow management and different strategy options you can use. One luxury in this area is not being in the position where you need to track every dollar that you spend. The “pay yourself first” method, where as soon as your pay hits your bank account, investments and other commitments are deducted, with you free to spend whatever is left however you choose, is the best example. Perhaps you merge this with a bucket strategy type approach to ensure money is set aside for bills and other expenses.

So luxury isn’t being able to spend without a thought to your future security, but just being in a position where once all the prudent things are taken care of, and you can live a happy comfortable life with the surplus.




Simplicity is a luxury that I find is often underappreciated. We regularly get asked whether a family trust would be a useful addition to a clients financial planning strategy. There certainly are instances where family trusts make sense, but quite often the extra cost and complexity associated with going down this route far exceeds the potential benefits.

Similarly, once upon a time it would be common for someone looking to invest in shares to buy individual shares and construct some sort of balanced portfolio. But these days we’ve got funds that enable easy diversification and are simple to access. Layered on top of this can be the services of administrators which track dividends, capital gains tax and the like, making preparation of your tax returns easy, and tracking of performance simple. Automation is another way to simplify your financial life, whether that be through transfer’s initiated from your internet banking, or via the use of an administrator to automatically allocate cash across different investments.

Some people, when they start out investing, like to be very hands-on, very engaged, as they learn how different investments work and behave. But likely, with a bit of time, the benefits of keeping things simple float to prominence. Simplicity is definitely a luxury worth pursuing.


Ability to have fun


And the final luxury I wanted to suggest for those who’ve achieved financial autonomy is the ability to have fun. There’s no trophy for being the richest person in the cemetery, and they don’t hand out awards for those who can be the most frugal. With your financial plans in good shape, the ability to enjoy some fancy drinks at a cocktail bar, spend a little more on the next holiday, or take up a new hobby are available to you. They are fantastic luxuries well worth the effort to attain.



All these luxuries circle back to having choice, which regular listeners will know is our north star here at Financial Autonomy. If a Chanel handbag is your thing, and you’re in a financial position where that’s affordable, go for it. Isn’t it wonderful to have that choice? But if that style of luxury is not for you, perhaps you’re getting your dose of luxury in other places, and if that’s so, I’m certainly cheering for you all the way.


Don’t forget to check out the GainingCHOICE email every Friday morning. If you’re not currently receiving that just go to www.financialautonomy.com.au/gainingchoice

Back to All News