Let's discuss: Financial Planning for Chanel/luxury bags?

[tenyongie]

Hi ladies!!
Since we all more or less spend big bucks on Chanel and other lux brands, I'm just really curious about the demographics (occupation), average monthly incomes and financial plans of bag lovers out here on this forum?
For example, how do you plan your finances when you're getting ready to buy a bag? Do you guys save aside a sum of money each month and what's the budgeting like and while doing so Do you sacrifice a lot of your daily allowances? So many things to talk about!
And also, what's a comfortable ballpark figure for average incomes to be able to afford such items without falling into debt? I've seen a lot of cases where ladies fall into heavy credit card burdens and had to sell away the bag because it was too much financial upkeep.
Also it'll be good for experienced ladies here to share good financial tips and advice for new buyers out here when saving for a bag! )

Let's talk about money and feel free to share!

[personally for me, i'm still a student and most of my items are from my parents' money lol but i'm about to start working soon and i know i'll definitely be buying bags so your financial advice here would be really useful to fresh working adults like myself!]

 

[MHLee]

This is an interesting set of questions. My parents always said, "live within your means." Hmm, it's hard to really say what a comfortable ballpark figure average for income is because it really also depends on a few other factors:

1. Where you live and household income: the cost of living varies heavily from state to state, country to country. You could make 100K a year/salary, but living in NYC or San Francisco where the cost of living is extremely high you wouldn't have much excess. Make that and in live in a state where CoL is super low, luxury expenses wouldn't be such a bad hit. Then both my husband and I work (double-income) so we can spend a bit more here and there.

2. Spending control: We all have to learn to control our expenses.

My tip for new buyers would be to research out what exact bag you want as your first luxury purchase and try to physically see it if you can, that way you hopefully don't find yourself regretting your purchase when it's too late to return. As a student soon to join the workforce—set aside money to save up as you go. You could use a credit card, but interest rates are killer on some of them.

I remember my days of living paycheck to paycheck first out of university, so I actually never looked into buying a bag. My first purchase didn't come until 30. With careful budgeting and planning, I could have purchased a luxury bag in my early 20s, but I was living in NYC at the time and decided to wait until my career was much more settled. I do look back and wish I did purchase my first Chanel then considering the price increases over the last decade, but you live and learn!

All in all, very good questions to cover for new buyers of luxury brands!

 

[Emily1830]

All of this is just my personal opinion:

1. Luxury items always should be last on the priority list. Rent/mortgage, bills, etc. come first.

2. Savings come next. Everyone should have an emergency fund should one lose a job or need a major expense, such as an unexpected medical emergency. You should also contribute to retirement AND one’s own personal savings.

3. Only buy a bag if you can pay for it outright. Don’t go into debt.

I think if you can manage the above, then you can buy a luxury bag. Personally I can buy a luxury bag outright but I always heavily weigh whether it is worth it by thinking about a big purchase for months and whether it will really be valued in my collection if I buy it. As I am getting older I am more and more conscious of my spending even though financially I am fine. Money will not last forever when you age—your financial future should be as important as the now. Sometimes as a culture we got blinded by the need to have the latest item, but it’s important to be financially responsible and to emotionally content with what we already have.

 

[MHLee]

All of this is just my personal opinion:

1. Luxury items always should be last on the priority list. Rent/mortgage, bills, etc. come first.

2. Savings come next. Everyone should have an emergency fund should one lose a job or need a major expense, such as an unexpected medical emergency. You should also contribute to retirement AND one’s own personal savings.

3. Only buy a bag if you can pay for it outright. Don’t go into debt.

I think if you can manage the above, then you can buy a luxury bag. Personally I can buy a luxury bag outright but I always heavily weigh whether it is worth it by thinking about a big purchase for months and whether it will really be valued in my collection if I buy it. As I am getting older I am more and more conscious of my spending even though financially I am fine. Money will not last forever when you age—your financial future should be as important as the now. Sometimes as a culture we got blinded by the need to have the latest item, but it’s important to be financially responsible and to emotionally content with what we already have.

Oooo #2 you wrote—that is a really, really good point -- Prepare for retirement, that's actually probably top on my list because if something happens to me it'll pass on to my children. When it comes to that, bags and luxury items take a far back seat.

My financial advisor made a good comment today to me, everyone should attempt to save up one year's worth of salary and have it set aside always.

 

[ilovemydog]

My first tip is to be responsible with your money and never, ever, ever go into debt for luxury items. It's very easy to get caught up in he hype because of influencers, youtube, or even this sub. But you never know what someone's financial situation is. You don't know if those influencers/youtubers or posters on here are going in massive debt or if a 6K bag is petty change or if they have enough for retirement. Make sure your bills are paid and that you're contributing to retirement, and whatever you have left over, put into a savings account. Contribute to your 401K/IRA etc and make sure that future you is set, because no amount of luxury goods will save you.

I personally have a high yield savings account with Discover, but there are other places like Ally, Synchrony, Marcus Goldman Sachs, American Express. There are no brick and mortar locations and it can take 1-3 business days for the money to transfer from my savings into my brick and mortar checking account, so I'm less likely to dip. I also keep my e-fund there and I never touch it. And anytime I have leftover money, I'll throw it into my "luxury" account and let it sit there until I find something I really want. It's not a set amount of money unless i'm about to purchase a specific bag. I mostly keep that account there so that I have the money should I want a bag later on. And if it helps I also have a "travel" account and I have been throwing away a specific amount of money each paycheck, but it's not a lot by any means.

When I see a bag I want, I become obsessed with it. I'll watch a million youtube reviews and what's in my bag, i'll search through this forum inside and out, and i'll put it on my pinterest wishlist. I tend to forget about pinterest so I end up only checking it every few months, and i've learned that when a few months go by and I go back to look at my wishlist, the bag will still make my heart flutter or i'll look at it and think "why did i ever want that?"

And I realize the irony in saying this but I do actually live a frugal life. I'm not into fashion, I somehow make my clothes last for years, I have a few pairs of designer heels and flats but I love my super stars and converse and will run them into the ground (especially since I wear converse for weight lifting). I've learned which grocery stores help me spend the least amount of money since healthy eating is a big thing for me and I also budget what i charge my credit cards. a CC is not an excuse to spend money you don't have. I know that I generally spend about $30 a week on food, so I'll use my credit card at the grocery store and move that money from my brick and mortar checking to my brick and mortar savings account. That way the money is absolutely there when the due date comes.

 

[vhuynh2]

House, cars, savings, retirement, and investments should be on track, and no credit card debt.

I don’t quite understand those who need to save over a long period of time to buy a bag or they otherwise can not afford it. If it takes that long to save that amount of money, it is likely more wisely spent somewhere else (such as savings/retirement/investments). I’m not saying it’s wrong, it’s just not what I would personally do.

 

[vhuynh2]

Another thing to keep in mind is that once you start spending a certain way, like buying luxury goods, chances are the habit will persist. It’s hard to go back. So I would really wait until you are financially secure and can comfortably afford luxury goods before making that leap.

 

[Emily1830]

House, cars, savings, retirement, and investments should be on track, and no credit card debt.

I don’t quite understand those who need to save over a long period of time to buy a bag or they otherwise can not afford it. If it takes that long to save that amount of money, it is likely more wisely spent somewhere else (such as savings/retirement/investments). I’m not saying it’s wrong, it’s just not what I would personally do.

I completely agree. Also I am of the mindset that you should have zero debt (except a mortgage perhaps) on credit cards and school loans.

Ideally you are also a home owner but of course that varies for each person.

If you have at least a year’s worth of emergency savings you have the money for a bag.

I also think you should consider creating wish lists and budget in the sense that you are spending no more than a set amount per year on luxury/discretionary spending. For example, assuming you have followed my advice, you could tell yourself that you have 2k/year budget on luxury items (or 5k, 10k, etc. depending on your salary and savings). Pacing is important when building a luxury collection and one doesn’t need to buy everything all at once. When I was younger I would allow myself a bag a year. Now I have enough bags that I’m almost entirely done with my bag collection (I will probably add one or two more but then I’m pretty much done for a while). Stick to classic items and they will last you a long time.

Lastly I want to add that you should consider ways to maximize your spending. For example, use E bates (I have to add a space in order for the word to appear) in conjunction with rewards points on credit cards and loyalist points. For example, if you bought a bag at Bloomingdales using E bates, loyalist points, and a good credit card, you could be getting 15-20% of your money back.

 

[gettinpurseonal]

I’m 50, which probably sounds old, but I started working at 15 and always put money in savings and the stock market/mutual funds. Even with its ups and downs, I’ve made a hefty amount, in addition to my income from my career. I also have several retirement funds/401k/IRAs. So anything I spend is just out of my investments fund. I didn’t start spending money on designer bags until I was in my 40’s, as I had college to pay for and kids to raise.

I highly recommend anybody make sure your priorities are food, housing, medical insurance, savings, reliable transportation, emergency fund, etc before you spend money on these fabulous luxury items. I have a very hard time knowing I pay for some people to be on welfare and Medicaid so they can save their money for designer bags. I work in the medical field and see it every day.

 

[remainsilly]

I like to pick up any lost coins seen during bike rides/walks.
Then put into blue mason jar on top of microwave oven.
So far, for 2019= $.17

Well on my way!

 

[highintheskyhiohsohi]

if u have to go into debt to buy a chanel bag u shouldn’t buy it . if u can’t pay it full in cash, again u shouldn’t buy it. u should be maxing out your retirement and have a nice savings acct . buying luxury goods should not be a priority if u don’t have the income to support it. just my honest opinion and yes i am a financial advisor

 

[Newbie2016]

There is NO good reason to ever go into debt for any kind of "luxury" be it a high end bag, a fancy vacation or expensive jewelry.
If you stay disciplined from a young age it will help you maintain financial stability as you grow older...
...and never do it to "keep up" with anyone else because unless your last name is Gates, Zuckerberg, or Bezos, etc (you get the picture) there will always be someone who can out do you.

 

[MHLee]

Hi ladies!!
Since we all more or less spend big bucks on Chanel and other lux brands, I'm just really curious about the demographics (occupation), average monthly incomes and financial plans of bag lovers out here on this forum?
For example, how do you plan your finances when you're getting ready to buy a bag? Do you guys save aside a sum of money each month and what's the budgeting like and while doing so Do you sacrifice a lot of your daily allowances? So many things to talk about!
And also, what's a comfortable ballpark figure for average incomes to be able to afford such items without falling into debt? I've seen a lot of cases where ladies fall into heavy credit card burdens and had to sell away the bag because it was too much financial upkeep.
Also it'll be good for experienced ladies here to share good financial tips and advice for new buyers out here when saving for a bag! )

Let's talk about money and feel free to share!

[personally for me, i'm still a student and most of my items are from my parents' money lol but i'm about to start working soon and i know i'll definitely be buying bags so your financial advice here would be really useful to fresh working adults like myself!]

Back to some of your original questions about demographics & financial planning now that I have a bit of time!

Financially: I see student loans come up a lot on here! I have to agree to try to get rid of them, but for me that wasn't a quick thing because of private medical school loans. The cost was and is still higher than a mortgage in many places, and residency paid a tiny fraction, so interest accumulated quickly. Then once out, thinking back the salary was there to get luxury bags, but the tax bracket was high. Add in my first home, and buying bags was completely out of the picture til later.

That forces a person to really shape up and learn the inside out of finances, benefits, and taxes. Now I've finally reached a point where I don't have to think about daily allowances and financial planning for anything because I worked to automate it all or planning for a luxury bag etc...BUT, when I do buy something I still get an apprehensive feeling because of what it took to reach that point, I don't think that will ever go away.

 

[classybags4ever]

House, cars, savings, retirement, and investments should be on track, and no credit card debt.

I don’t quite understand those who need to save over a long period of time to buy a bag or they otherwise can not afford it. If it takes that long to save that amount of money, it is likely more wisely spent somewhere else (such as savings/retirement/investments). I’m not saying it’s wrong, it’s just not what I would personally do.

Totally agree with this. I didn't even think to buy my first designer bag until I was in my 30s, had a stable job and house and savings. It wouldn't even have crossed my mind in my 20s, even when I was working my first job out of college.

I'm still buying bags (chanel is addictive, believe TPF , but at this point, and I know I'm very fortunate to be able to say this, they just aren't a huge percentage of my total savings or income. I don't have to give up other things to be able to buy them.

Kind of the same thinking why I've never understood why people buy Chanel preloved. If the difference between 3k and 6k is significant for you, then you probably aren't financially ready to purchase an expensive bag like that.

 

[vhuynh2]

Totally agree with this. I didn't even think to buy my first designer bag until I was in my 30s, had a stable job and house and savings. It wouldn't even have crossed my mind in my 20s, even when I was working my first job out of college.

I'm still buying bags (chanel is addictive, believe TPF , but at this point, and I know I'm very fortunate to be able to say this, they just aren't a huge percentage of my total savings or income. I don't have to give up other things to be able to buy them.

Kind of the same thinking why I've never understood why people buy Chanel preloved. If the difference between 3k and 6k is significant for you, then you probably aren't financially ready to purchase an expensive bag like that.

Agreed. There are so many “I’m celebrating my first real job out of college — which luxury bag should I buy” threads. How about invest, max out 401K, save for a down payment, etc — it’s never too early to do any of those things and the earlier you do it, the better. Investing that money instead could even mean an earlier retirement. That’s way sweeter than starting a luxury bag collection at a younger age.