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

[bellebellebelle19]

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!]

As a person who was a student just a few years ago myself, I thought I'd chime in!

At our age, when having money we earned for the first time, it's so easy to go crazy and not be responsible with our money! My biggest tip for avoiding that is to automate your savings. I believe banking apps can do that. Saving for retirement is an absolute given, but I'd make goals for other things as well. Would you like to start investing, saving to buy a home, saving for a wedding?

Also, I overbudget EVERYTHING. I overbudget how much I think I'll eat, my transportation costs, my "going out" money, and often times I don't spend it all. This way, I'm tricking myself into living below my means haha! Rather than feeling like I'm saving money towards a bag and I should be using for something else, I get to feel proud that I didn't spend so much on eating out and now I can use the money on shopping. Also, this is a great way to delay your shopping so you don't impulse buy things you don't really want or need.

And I'd be sure not to beat yourself up over mistakes. You're young and most of us were foolish when we were young. I once bought a Dooney bag on Dooney Pay, and even though it was only a small amount, I was super stressed. I learned never to buy anything on credit again! As long as you stick to your savings goals, you'll be okay Good luck and have fun!

 

[gettinpurseonal]

Everyone here should have insurance.

Check with your homeowner’s insurance to see how your bags are covered: they are subject to your deductible up to your personal property limits (different than the amount your home is insured for). Also, they are only covered for specific losses such as fire or theft, not simply losing the bag. Some policies are “actual cash value” with depreciation, not “replacement cost,” so if your deductible is $2000 or $5000 & the bag has been used, you may not receive any money.

You may be able to add a “rider” or “floater” to your policy to individually cover each bag for many other types of losses, such as mud splattering on it or getting run over by a car etc, with no deductible.

If you don’t own a home, get renter’s insurance. It covers a lot more than homeowner’s insurance and costs only about $10 a month!!!

Have you thought about the possibility of theft or loss? Just sounds like because it's been such a difficult and long endeavor that that would be heartbreaking. This is why I choose not to buy bags unless they are still less than the amount of 1 paycheck - and even then I limit my bag purchases to about 2-3x a year.

 

[bisousx]

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.

Respectfully, this is a little shocking to read and doesn't sound like fiscally responsible advice at all. $3k is no small change, even if you're a millionaire. How one chooses to save their money in certain manners has no bearing on whether it's affordable or not

 

[chanelbee23]

I admire your dedication to prioritizing necessities and am excited for you to finally get your dream bag! I am also curious, though, as to where you live based on your comment about using the bag fund as a downpayment on a home instead.

I do have a concern, though, since it sounds like you've been lusting after this bag for 15 years. Have you thought about the possibility of theft or loss? Just sounds like because it's been such a difficult and long endeavor that that would be heartbreaking. This is why I choose not to buy bags unless they are still less than the amount of 1 paycheck - and even then I limit my bag purchases to about 2-3x a year.

Hi! Sorry if my post was unclear - the amount I had saved was most definitely not enough for a down payment on its own haha! I live in Dubai. What I meant was I had been saving separately for a down payment, and when a property I liked was available for sale, I liquidated my Chanel Fund to supplement my other savings and put it towards the down payment.

With regards to theft, I'm not too worried about that - I live in a really safe city, I intend for the bag to be an everyday work bag, so it would either be on my person when I go to external client meetings, or in my desk drawer in the office.

Also, I don't know if I would necessary call my endeavour difficult - long, for sure. But every time I was close to pulling the trigger, I did something else with the money instead - used it to fund a down payment, bought myself a Cartier watch for my birthday (after much quiet stalking through tPf!) , took my parents on holidays - all things that made me extremely happy so I never really thought of it as missing out on purchasing a bag. Like someone else mentioned in this thread, when you're in uni you imagine that you will spend your first few salaries on a luxury bag, but I definitely think as I've grown older my priorities have changed. I still love the bag and still want it, but I'm happy for it to take time if it means I get to use my money for other (more important to me) things before I do.

Hope this makes sense!

 

[bisousx]

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

I agree with the above.. except a little bit of credit card debt is also good/necessary to build your credit. As long as you’re paying off the debt consistently, on time and maintaining under 30-50% of your max limit.

Exactly! There has to be some indulgence along with responsibility as @GuyAmberFire stated, "tomorrow isn't promised."

I’m glad someone said this. There is nothing like being young and fabulous. No regrets here!

There isn’t an all inclusive rule to saving and budgeting. If you’re young and don’t have a hankering for a house yet, go and enjoy your life. When you’re ready to save up for a down payment, then you can hustle, scrimp and sacrifice! I can’t tell you how much I spent on traveling, nights out with my girlfriends, trying out the newest restaurants and nightclubs. When you hit your 30s, it’s like pulling teeth to go out anymore. So I am glad I lived in my life to the fullest when I was young. Then when my friends started to become boring, so did I, and it was a perfect time to save aggressively. Ended up with several properties, and planning on acquiring many more. Which all pay for themselves. Let your money work for you, not the other way around

Determine what *your* priorities & goals are, tackle them aggressively, but don’t forget to enjoy your life and feel alive. For me, there’s nothing that makes my eyes sparkle more than a nice Chanel or Hermès bag!

 

[vivian518]

Luxury is what the name implies: luxurious not necessities. So make sure you have all necessities taken care of, including savings and investments, before buying luxuries.
And remember luxuries come in many forms. Handbags or fashion is only one of them. I have seen girls who have designer wardrobes but live in a small apartment with barely any furnitures.

 

[bernz84]

Lots of good advice here. All I’ll say is that I didn’t buy a Chanel bag until a few years ago and into my 30s. Truthfully I wish I were more financially responsible in my early twenties, but eh, it was a fun, crazy time.

 

[jellyv]

Luxury last. A simple and pretty self-explanatory motto.

 

[MHLee]

****For you, students coming out of school on loans here are some resourceful, easier to read links on tackling the debt. The Forbes one is good because it looks at rebuilding credit, taking care of defaulted loans on a personal level. The journalist goes into a bit of detail on traditional vs. secure credit and refinancing:

• https://www.investors.com/etfs-and-...s-for-millennials-tackling-student-loan-debt/
• https://www.forbes.com/sites/andrewjosuweit/2017/05/17/5-steps-i-took-to-conquer-107000-in-student-loan-debt/#43bc54006c86
• https://www.thebalance.com/how-to-pay-off-student-loans-2386006
• https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public-service
• https://studentloanhero.com/featured/ultimate-guide-paying-off-student-loans-faster/

There's a ton of great advice on this forum especially for when you're more into your career, but I wanted to give some links for more detail since the OP was asking as a soon-to-be graduate (not sure if there are loans or not), and hopefully, for any other new grads with loans out there reading the discussion as they prepare to face student debt.

 

[EdnaMode]

****For you, students coming out of school on loans here are some resourceful, easier to read links on tackling the debt. The Forbes one is good because it looks at rebuilding credit, taking care of defaulted loans on a personal level. The journalist goes into a bit of detail on traditional vs. secure credit and refinancing:

• https://www.investors.com/etfs-and-...s-for-millennials-tackling-student-loan-debt/
• https://www.forbes.com/sites/andrewjosuweit/2017/05/17/5-steps-i-took-to-conquer-107000-in-student-loan-debt/#43bc54006c86
• https://www.thebalance.com/how-to-pay-off-student-loans-2386006
• https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public-service
• https://studentloanhero.com/featured/ultimate-guide-paying-off-student-loans-faster/

There's a ton of great advice on this forum especially for when you're more into your career, but I wanted to give some links for more detail since the OP was asking as a soon-to-be graduate (not sure if there are loans or not), and hopefully, for any other new grads with loans out there reading the discussion as they prepare to face student debt.

It seems like most people get that luxury comes after necessities. What constitutes as necessities are different for each person. While I agree and have personally bought expensive handbags after student loans were paid off, I do agree that people should enjoy their lives. I have heard the student loans for the newer generation is a lot higher so it's easy for the older gens to say this or that (I'm late 40's), but it's not necessarily fair. As someone said tomorrow is not promised and I've seen first hand where people are very prudent and put things off to the future and unfortunate things happen. Wish everyone wonderful handbags all in good health and happiness.

 

[MHLee]

It seems like most people get that luxury comes after necessities. What constitutes as necessities are different for each person. While I agree and have personally bought expensive handbags after student loans were paid off, I do agree that people should enjoy their lives. I have heard the student loans for the newer generation is a lot higher so it's easy for the older gens to say this or that (I'm late 40's), but it's not necessarily fair. As someone said tomorrow is not promised and I've seen first hand where people are very prudent and put things off to the future and unfortunate things happen. Wish everyone wonderful handbags all in good health and happiness.

That's actually a really good point on the inflating loan amounts and rates. I'm always reading those financial sites and came across a couple and thought maybe it's not a bad idea to post them on TPF—it never hurts to share a bit more!

 

[Kat_Yorkie]

Hi there! Thanks for posting this. It's a great idea. Thanks to all the wonderful experienced ladies who have shared their great advice as well!

I graduated school in the last 5 years and here's my simplified advice if you don't have any loans:
-Make sure you're contributing the max amount your company allows/will match for retirement
-Make sure you're saving ~30% of your after tax/after 401k income each month to put into your normal savings account
-If you still have leftovers after your necessities each month and you meet the above points then it doesn't hurt to start adding the extra change that wasn't spent that month to a fun purchases account for luxury By slowly adding to an account it will help prevent you from making impulsive bag purchases I've found.

 

[ilovemydog]

It’s also important to not completely focus on the responses in the polls because salary/income alone doesn’t tell the full story. 5K a month in San Francisco is a lot different than 5K in Jacksonville, Florida or Tulsa, Oklahoma.

I found the following thread interesting: https://forum.purseblog.com/threads...-how-much-do-you-have-saved-and-where.389298/

The reality is we’re on a handbag/luxury forum and there’s going to be people from all different backgrounds and financial situations. You never know who is tens or hundreds of thousands of dollars in debt yet splurging on Chanel or Hermes, or who lives with their parents, graduated without student debt and has a trust or UGMA set up for them. There’s a million different scenarios and everyone reaches a point in where they’re ready to make such expensive purchases at different stages in their lives.

If you do have student loan debt, a lot of people find Dave Ramsey helpful although I would steer clear of his investment advice (I believe he’s affiliated with certain companies so he benefits from his own recommendations).

There’s nothing wrong with saving for bags, but make sure it doesn’t take priority over your rent, retirement, car, insurance or whatever other obligations you have.

 

[CelineLee]

This survey has an interesting outcome. I can't help but wonder, is the question posed assuming monthly gross or net income? I fall into one category for gross, and another category for net.

 

[OCMomof3]

This survey has an interesting outcome. I can't help but wonder, is the question posed assuming monthly gross or net income? I fall into one category for gross, and another category for net.

I answered assuming it was net.