Luxury or Necessity? When Splurging on Big Purchases Makes Sense

The general rule of thumb in personal finance is to avoid unnecessary splurges—luxury is often seen as an indulgence we can't afford if we’re trying to be responsible with our money. But sometimes, spending on what seems like a luxury may actually be justified.

Not all big purchases are bad decisions; some add value, create life-enriching experiences, or even save money in the long run. It's about understanding the context in which a big purchase makes sense, and recognizing when it’s okay to prioritize quality or experience over frugality.

1. Investing in Quality for the Long Term

We’ve all heard the saying, "Buy cheap, buy twice." When it comes to certain items, spending more initially can actually save you money in the long run. Take, for example, buying a good-quality mattress. While it may be tempting to save money by buying a budget mattress, a high-quality one can last over a decade, improve your sleep quality, and support your overall health.

Other items that fall under this category include high-quality appliances, durable shoes, or well-made furniture. The initial price tag might seem steep, but these purchases are long-term investments that bring daily value. In the end, buying quality can actually be more economical because you won't need to constantly replace inferior products.

2. Splurging on Experiences: More Than Just a Price Tag

Certain experiences come with a high price tag, but that doesn’t mean they’re not worth the splurge. Big-ticket experiences—like a dream vacation, attending a major event, or even a special dinner at a Michelin-starred restaurant—may seem frivolous to some, but the value they bring often goes beyond money. It’s not just about a vacation or a meal; it’s about creating memories, bonding with loved ones, and experiencing things that bring joy and fulfillment.

I still remember when I was 19 and a group of my best friends planned a trip to Bali. It felt reckless at the time to put a vacation on a credit card, but here we are, 25 years later, still reminiscing about that unforgettable adventure. The short-term debt was paid off, but those memories have lasted a lifetime.

The decision to splurge on an experience should be a calculated one, of course—but sometimes, choosing experience over savings is the right call. After all, life is meant to be lived, not just endured.

3. Prioritizing Health and Wellbeing

Health is wealth, and sometimes spending a bit extra on your health can pay off in more ways than one. This could be anything from investing in a gym membership or quality exercise equipment to paying for organic foods or therapy sessions. Many people see these as luxuries, but prioritizing your physical and mental wellbeing is anything but frivolous.

Cutting corners when it comes to health can lead to greater expenses down the line—both financially and emotionally. Spending on things that help keep you active, healthy, and happy can prevent costly medical bills and give you a better quality of life overall.

4. Tools for Success: When Spending Enhances Your Productivity

Sometimes, splurging on a big purchase can help you achieve your goals more efficiently. Take, for instance, buying a high-quality laptop if you’re a freelancer or a remote worker. While it’s possible to make do with a basic model, a faster, more reliable machine can help you work more effectively, save time, and ultimately increase your earning potential.

The same goes for tools or equipment that help you excel in your hobbies, side hustles, or career. Buying a good camera for a budding photographer, professional tools for a craftsman, or a quality standing desk for a remote worker can enhance productivity and ultimately help you achieve more in less time. Sometimes spending more upfront is a strategic move that yields better results in the long run.

5. Purchasing for Comfort and Convenience

Sometimes, splurging is about making your day-to-day life easier or more comfortable. Items like a dishwasher, a more reliable car, or a robot vacuum cleaner may seem like luxuries, but they also free up your time, reduce stress, and bring convenience. Time is valuable, and anything that saves time or makes your life less hectic is worth considering.

This doesn’t mean rushing out to buy every gadget that makes a promise of convenience, but if a big purchase significantly improves your quality of life, it could be worth it. Investing in comfort isn’t a bad thing if it ultimately supports your well-being and frees you up to focus on more important things.

6. Splurging to Reward Yourself

It's easy to get caught up in being overly frugal, but it's also important to celebrate milestones and reward yourself for hard work. Whether it’s a special piece of jewelry, a designer bag, or a nice watch, rewarding yourself for achievements can be motivating and help create a positive association with your financial journey.

The key here is to do it occasionally and for the right reasons. Treating yourself for meeting a financial goal or for a big career win is different from impulse spending because you're stressed or bored. When it’s a planned reward, it becomes a motivator rather than a regrettable expense.

7. Spending to Strengthen Relationships

Another area where splurging can make sense is when it strengthens relationships. Throwing a big birthday bash, buying concert tickets for a shared experience, or hosting a holiday gathering can seem expensive—but these are often moments that bring people together. Building and maintaining relationships is a core part of life, and sometimes it’s worth spending a bit more to create those shared experiences that bring joy to the people around you.

8. Education and Personal Growth

Education is often a worthwhile splurge—whether it's formal education, like a course or degree program, or informal, like online courses, workshops, or seminars. Investing in yourself is almost always a good decision, particularly if it helps you grow your skills, advance your career, or even just satisfy your curiosity.

Personal growth and self-improvement are areas where the return on investment can be substantial. Unlike a material purchase, what you gain from education can pay off for the rest of your life. Spending on learning opportunities is usually more of an investment than a luxury.

9. Buying When the Timing Is Right

There are times when big purchases come with perfect timing—like buying a new car during an end-of-year clearance or investing in home improvements when incentives are available. Timing can make a splurge less financially daunting, and sometimes waiting for the right moment means a much better deal.

The key is to do the research and understand the difference between impulse spending and a well-timed opportunity. When the timing aligns, that splurge can actually be a smart move.

10. The Importance of Balance

Ultimately, the decision to splurge is all about balance. Not every purchase needs to be analyzed to death to justify its worth, nor should every expense be based purely on necessity. Sometimes, a splurge is about finding joy, improving your quality of life, or creating memories that will last a lifetime.

The key is to know your own financial limits and to ensure that your spending aligns with your values and goals. By being intentional with when and why you splurge, you can make big purchases that add meaning and value to your life—without the buyer’s remorse.

Remember, personal finance is not just about minimizing expenses and maximizing savings. It’s about making decisions that support your overall wellbeing and happiness. When approached with thoughtfulness, a big splurge can be just what you need to enhance your life in ways that numbers on a spreadsheet can’t always capture.

Featured Image Credit: Unsplash / Photo by Alexandre Chambon.