Investing and Debt Pay-Off | Saving and Spending

How to Afford a Luxury Lifestyle Even If You’re on a Budget

You can live a life of luxury, even on a budget. The key is to be selective about what you spend your money on, which is understanding what really adds value to your life.

Many of you are on your journey to greater success. But it can be frustrating to feel like you have to live like a pauper while you grow your business, pay for those courses you need to increase your income or pay off debt.

I know this feeling all too well. When I was getting my insurance license and starting this blog, I had to watch every penny—but at the same time, there was no way I was going to go backwards in life. I managed to continue to be proud of the way I dressed, the car I drove and the place where I lived. Part of it was being very particular about what I spent my money on.

The other part of it was attitude and perspective—I think we should always be grateful of what we already have. I think too many people are always wanting more—more time, more money, more things.

Not that wanting more is a bad thing; it can motivate us to improve our lives or make needed changes. I think it’s okay to want to nice things to a degree. It’s called having standards. The only problem is, many people have standards but not the cash to do it—or at least they think that they don’t.

In this article, I’m going to show you how you can “create” more money by practicing the art of selective spending. But first, in order to live a luxurious life, you need to decide what that means to you.

quote: Luxury, like a minimum wage, is a relationship; it changes as we age. -Vida Dutton Scudder


I think most of us can agree that driving an expensive car, living in a mansion and staying at five star hotels means luxury. But what if you can’t afford all of that right now?

You can still feel like you’re indulging and living the good life on a limited income. You just have to decide which luxury items that you can afford matter the most to you.

Depending on your budget, you may be able to spend a few night in a five-star resort if that really would mean a lot to you—or maybe that matters less but you want a really nice place.

Perhaps you want to look like a million bucks but the car you drive or where you live means a little less. Still, you may be on such a tight budget right now that just being able to sit at a cafe and indulge in a latte and scone may feel like a luxury. That’s okay. If you keep reading this blog, you’ll have more money in the long run and be able to afford more of what you want.

Consider making a list of the luxury items or experiences you want and ranking them from most desired to least. Some things you might want to put on that list are:

  • a nice watch or handbag
  • a sports car
  • staying at a five-star hotel
  • upgrades in your home, such as granite countertops
  • living in a gated community
  • a nice pool
  • eating at four and five-star restaurants

No matter what financial stage you’re currently at, you still have to choose. As I often say, you can’t buy everything—even if you’re wealthy. And knowing what luxury items (or experiences) would mean the most to you is the first step to having the lifestyle you want.


I talk a lot on this blog about downsizing your place of residence. Why? Because you home or apartment is likely to be one of you biggest ongoing expenses.

I believe that, when it comes to our places of residence, we should go for quality instead of quantity. That’s because a newer home or apartment is more likely to be in a safe neighborhood, have far fewer issues and you can feel like you’re living in a luxurious place without the huge price tag.

Too many people buy more space than they really need and then they fill it up with junk. (More on that later.) Unless you’re literally a king or queen—or other type of multi-millionaire, you shouldn’t be living in a huge home.

As I wrote in What the Europeans Taught Me About Being Frugal, the average home size in the United States, as well as some other countries like Australia, has gradually grown over the years. It’s getting to the point that middle-class Americans are working their butts off and rarely seeing their kids just to live in a McMansion.

To feel like you’re living a life of luxury, even if you’re on a budget, I recommend a nicer but smaller place. Think about when you travel and stay in a nice hotel: Your room may be on the small side but doesn’t it feel nice to have the upgraded sinks, the amenities of the hotel and maybe even a nice view?

I like the tiny home movement because it shows us that we can actually live in smaller spaces that still function well and give us all we need. (Maybe not all that we want, but all that we need.) The tiny home movement teaches us that we can get creative with storage and space, such as going up the wall instead of across when creating storage.

This luxury tiny home will make you feel like you’re living the good life!

While you don’t have to live in a tiny home, downsizing to say 2,000 square feet from 2,800 can make a huge difference in you budget: You won’t have to heat and cool as much space and you won’t be tempted to buy as much stuff because you won’t have the space for it.

Another option is to move into a luxury apartment. This is the avenue I take because I like freeing up my time and money for other things rather than dealing with the constant maintenance of a home. I explain the advantages of living in luxury apartment in my article The Myths of Home Ownership (and How Renting Makes Life Easier).

Remember, too, that the more home you have, the more you’ll have to manage and even worry about protecting. Likewise, the older the home, the more time and money you’ll spend on maintenance and repair. Also, the more likely you are to live in a declining neighborhood.


In talking to and observing a lot of people around me, I’ve found that most people could easily afford a nicer lifestyle if they would stop making one common mistake, and that’s not being selective about what they spend their money on.

So many people spend blindly, meaning they buy things that they don’t really need or want or even use. Does this sound like you at all?

Selective spending is about being picky about what you spend your money on. By practicing it, you free up your money to buy the nicer things that matter the most to you. Being selective applies to all aspects of your financial life, from everyday expenses, to extras like vacation to what you invest in.

I talk more about thinking before you buy in my articles Mindful Spending: The Secret to More Joy and More Money and How Selective Spending Increases Your Net Worth. Knowing how to buy selectively is an important key in wealth creation. Without the practice of mindful or selective spending, you’re making life harder on yourself.


Americans (and some members of other cultures) love to buy just for the sake of buying. It can be fun to buy something in the moment but the end result is clutter, more junk, less money to invest and sometimes even credit card debt. How much “stuff” is lying around your house that you shouldn’t have bought in the first place?

I want to you to try an exercise: Grab a pen and paper. Look around your home, including all closets, and start making a list of any item you don’t really like or haven’t used within the past year. (Any item you haven’t used in the past year and hang onto “just in case” needs to go on this list!) What did you come up with? How many of those items did you buy in the moment but could have lived without?

These are items that could have been saved or spent on other things that bring more value to you and they’re clogging up your life. I often say, the more you own, the more you have to manage. It can be liberating to learn how to pass up something we think we want in the moment.

The next time you go shopping, try asking yourself these questions:

  • Do I love it?
  • Is it something I really need and will use?
  • Do I feel like I can easily afford it?
  • Is this adding value to my life or will I at least really value having it?

If you answered yes to those questions, proceed to the next two questions:

  • Will buying this put me into any financial duress?
  • Do I already possess an item similar to this one that looks good and works perfectly well but I’m just looking for an upgrade?

If you can honestly answer no to those two questions, you should buy the item and, congratulations, you just practiced the art of selective spending! The more you ask yourself these questions before you buy, the more you’ll have only items in your life that matter, the less clutter you’ll have, and the more money you’ll end up with.

I think we can also all agree that luxury means not just nice things around us, but also a clean and organized environment. That list you created with items you no longer want or use? Consider getting rid of it all. If you’ve ever seen the inside of a really wealthy person’s home, you probably didn’t see any clutter. That’s because a cluttered home can clutter the mind.


Being selective in what you spend your money on applies to everyday expenses, too. Some things we can’t get out of—like paying for electric. But do you have multiple subscriptions for streaming movies? Still have cable? What about that gym membership you never use? Almost everyone I talk to has at least one ongoing monthly subscription they’re paying for that they either don’t need or aren’t using at all.

What about that monthly charge added to your cell phone bill for the new phone you get every year? And the insurance you have to buy because the phone cost more than the four tires on your car? If having the latest state-of-the-art Android or iPhone doesn’t rank high on your luxury list then here’s an idea: Switch to a much less expensive phone, skip the insurance (because if it breaks, you can just buy another one) and save a bundle.

Go over your monthly expenses with a fine-toothed comb. Find the things that you aren’t using, don’t really need or aren’t adding any real value to your life. These little expenses may not seem a lot per month but if you add that up over the course of year–or more–that’s a nice chunk of change that you can use to invest in instruments that will make you even more money. Get rid of them and you’ll create even more money to use toward those luxury items or experiences that are on your wish list.


Maybe you can’t afford a meal at a nice restaurant but perhaps you could go there for coffee and desert. Maybe you can’t afford a whole wardrobe of nice clothes: You could still buy a couple of really nice outfits for special occasions or important business meetings. Sometimes we can only afford a sliver of what we would really like but that’s okay.

Want to stay in a five-star resort but can’t really afford to stay there your entire vacation? Choose a cheaper place for four of the five days you’re away and on that fifth day, book a room at a top hotel. This can give you a taste of what your life will be like when you finally hit that higher threshold of wealth.

You can also use substitutions. I compare this to eating fewer calories. For example, I love ice cream but ice cream is fattening. So I’ll make thick smoothies instead. They taste just as good but are a lot healthier.

What substitutions can you use for the luxury lifestyle you would like to have? Maybe you buy a watch that looks rich but only cost you $50. Maybe you can’t have the BMW sports car you want but you can afford the one by Nissan (or a cheaper model by BMW).

Maybe we can’t always afford exactly what we want but getting a nice substitute—or a smaller piece of the luxury pie—can give us that fix without breaking the bank.


The other mistake that I see a lot of people make is that they’re too proud to go for the discount. These people aren’t millionaires yet they won’t use discount sites like Groupon, Expedia or shop at discount stores like TJMaxx because they’re too proud. My question is, why? You can enjoy luxury places and buy designer labels at a discount by choosing these options.

If this sounds like you, ask yourself why you feel too insecure to take the discount. Are you really that worried about what other people might think? (If you’re worried that much about what other people will think then just tell them the white lie that you bought it somewhere else.)

There is, however, a certain time versus money saved involved in the choice to take the discount or not. For example, I know people who will go from store to store or spend hours online searching for a discount that will only save them a small amount (like $10).

Some people spend their whole lives wasting time on petty savings instead of spending that time on improving their skills so that they can earn a lot more money. Instead of spending all day trying to save a few bucks, pay more and take the time you save to become an expert in the field of your chose so that you can earn a lot more. I discuss this in detail in my article 5 Steps to a More Exciting and Lucrative Career.

But if it’s a bigger ticket item, like a car, home or perhaps even something like a laptop, then of course it would be crazy not to do your homework. Also, if someone hands you a discount on the spot, like a two-for-one sandwich, then there’s no reason not to take it. I talk about how taking the discount is important in How to Live Really Well on a Budget.


Want more money so you can upgrade your life? Then you will need to learn how to invest properly. If you take the money you save by following the steps above and invest it properly, you can create even more money that you didn’t have before.

I say this often on this site: Poor people save; rich people invest. If you want to continue to expand your life of luxury, you’ll need to learn how to grow your money passively.

If you want to learn more about how to get richer faster, then read my articles on how to invest: How to Become a Millionaire: A Beginner’s Guide will jump-start your path to more wealth and Why Everyone Should Own Dividend Stocks (A Simple Guide) talks about my favorite form of investment and how you can get started.


Life can be full of little luxuries even for the strictest of budgets. Even if you’re a student, are paying off debt or have a small income at the moment, you can still find ways to feel pampered and special. After all, this is the core of our desire to indulge in the finer things.

Sometimes luxury can actually be very cheap or even free. Sleeping in costs time but not money. Sitting at your favorite coffee shop sipping on tea while you read a good book (that you can get free from the library) could cost you less than $4.

Taking a bubble bath, fixing a good meal at home…What other “luxuries” are you missing out on because you think luxury can only be bought in a store or comes only in the way of a car, home or hotel?


For those bigger luxuries, you can still find a way to indulge on occasion. The money you’ve saved by downsizing, focusing on quality instead of quantity and being selective in what you buy can create extra cash you didn’t realize you have. Take that money and invest it and you’ll have even more.

No matter what, don’t ever go into debt just to upgrade your car or trivial things like a designer handbag. Having a working vehicle might be essential but having a really nice one is not. The same holds true for purses, phones, TV’s and even our place of residence. If debt is holding you back from being able to afford more of the luxuries you would like, check out my article How to Free Yourself From Debt and Live a Better Life. It’s always important to keep that balance of indulging on what we can afford but not ever going into debt to do it.

There’s nothing wrong with indulging on occasion when you know it won’t hurt you financially. Just remember to buy the luxuries that you can afford and that matter the most to you. It’s your money, your life, your priorities. Choose wisely and the quality of your life will improve.:)

What are ways that you are indulging now within your budget? What expenses will you reduce or eliminate so that you can afford more of what you want? You can email me at and let me know. I would love to hear from you. Au revoir, namaste and until next time!

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