The Hidden Costs of Luxury Items

Tiffany Co.

Most of us enjoy luxurious things. They look nice. They feel good. They confer status and elevate us above our peers. We’re conditioned from an early age to want the best clothes, beauty products, electronics, jewelry, cars, or furnishings. In our quest to have the best, many of us only look at the price tag. If the item is affordable or we can get financing for it, into the shopping cart it goes. However, there are some additional costs, both monetary and psychological, that many people fail to consider when purchasing that luxury item. Here are nine downsides to luxury items that may make you think twice before buying that super expensive what-not.

1. Insurance. If the item is valuable or very expensive, you’re probably going to want to insure it against loss, damage or theft. Insurance premiums add to the already high cost of luxury items, plus you’ll have to keep up with more paperwork and take the time to find good insurance.

2. Taxes. In most states, items such as cars, houses, boats, and RV’s are assessed property taxes based on the value of the item. Obviously, a very expensive car or house is going to cost more in taxes than a cheaper model. Also, in some states you must pay a “luxury tax” on certain goods. Many people forget about the taxes until that first bill comes in and delivers a nasty shock to the budget.

3. Care and cleaning. Some luxury items come with expensive care requirements. That $20 shirt from the department store can be machine washed, but the $300 designer one must be dry cleaned. Expensive furniture or carpets must be cleaned with special treatments. Fine china can’t go in the dishwasher. These special care requirements add up, both in money and the time required to care for the item.

4. Luxury creep. This is an insidious process that can end up costing you thousands if you aren’t careful. You buy a pair of designer shoes and suddenly your department store clothes aren’t good enough to go with the shoes. After you buy new clothes, you see that your cheap handbag doesn’t look right with the expensive clothes and shoes. Or maybe you bought a new plasma TV. Now your old speakers can’t deliver the sound such a fine TV deserves. Once you’ve bought the speakers, you see that it would all be so much better with an HD DVD player. Then you need the HD DVD’s to go with it. And on it goes until you run out of money.

5. Increased risk of theft. Unfortunately, owning luxury items makes you a target for thieves. They see you with that designer bag or expensive jewelry and think, “Jackpot!” Or they go by your house and see your new TV through the window (or its box by the curb for the trash man) and vow to come back later. Insurance will cover part of this problem, but there’s a psychological cost involved, as well, of knowing you’re a marked person.

6. Storage. As with the care and cleaning mentioned in number three, some luxury items have expensive storage costs associated with them. That jewelry really should be in a safe deposit box when not in use. That RV can’t be stored at your house per the HOA, so you have to rent a storage space. Fur must be stored in a climate controlled environment, usually one you rent. Special storage costs add up over time, not to mention the hassle of retrieving your item when you need it and then returning it to the storage facility when you’re done with it.

7. You may be stuck with it. If the day comes when you want or need to get rid of that luxury item, you may find that you’re stuck with it. There’s a smaller market for luxury items and “toys” than for regular goods, so you may not be able to find someone who can or will buy your jewelry, designer clothes, expensive car, RV, or huge house. If you can find someone, it may take awhile and you may not be able to get your asking price. If you think the day will come when you won’t want the item anymore or you may need the money instead, you might be better off opting for a less luxurious product in the beginning.

8. Parts, service, repair and maintenance. These all may be hard to come by and will be more expensive than that for regular goods. It’s more difficult and expensive to get parts for luxury cars, or to find garages that service them. Only so many places can work on that 45-foot motor home and they may not be nearby. If your designer dress needs alterations, your local tailor may not be able to handle it. Your special electronic item may have to be sent back to the factory for repair, rather than taken to a local repair shop. When a luxury item needs attention, it is likely to cost you more money and time to find someone who can handle the problem and your DIY options are likely to be limited or non-existent.

9. Fear and anxiety. The last item on this list is purely psychological. It’s the fear and anxiety that comes from worrying about losing or damaging your luxury item. This fear affects how, and even if, you use your item. You don’t let anyone sit on the “good” sofa because it might get dirty. You don’t wear your “good” jewelry because it might get lost. You fear driving that sports car because it might get damaged or a bird might poop on it. You don’t wear your designer clothes when it might rain. This fear and anxiety takes a lot of the joy out of owning luxurious things. What’s the point in having it if you can’t fully enjoy it?

These nine reasons (and especially the last one) are why I look for items that are “good quality” without being luxurious. Quality goods will last and function well without the additional problems and costs associated with luxury items. I don’t want to feel like my items are running my life with their difficult care, expensive insurance, and annoying storage requirements. I just want good quality items that will last and that I can enjoy without fear of loss or damage. The ability to really enjoy my “stuff” is worth more to me than any premium feeling, look, or status gained by purchasing luxury items.

Image courtesy of minxlj

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