5 Luxury Items You Shouldn’t Buy Before Having $100K In Savings

Young Americans may have smaller bank balances but are often the most willing to take financial risks. A recent McKinsey study reveals that 63% of Gen Z consumers plan to splurge over the next three months, making them the generation most likely to indulge.

While the occasional spa day or concert is a great way to unwind, regularly making risky spending decisions can jeopardize your financial security — especially if your savings aren’t equipped for the hit. Should a financial emergency arise, that new Prada bag won’t be of help much if you’ve only got $1,000 left in the bank.

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Whether you’re a Gen Zer looking to elevate your lifestyle or a millennial who enjoys living on the edge, here are some luxury purchases to avoid until you’ve saved at least $100,000 .

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Fancy Cars

Unless you enjoy the idea of a giant financial money pit, it’s best to steer clear of shopping for any luxury cars.

“Fancy cars are a luxury that will keep on costing you,” said Erika Kullberg, personal finance expert and founder of Erika.com . “You’re not just paying more on the lot. The more your car costs, the more you will pay in interest for your auto loan. You also end up with higher insurance premiums, vehicle registration and maintenance for as long as you own the car.”

Even opting for a used luxury car can lead to expensive headaches down the road with expensive parts and frequent trips to the mechanic.

It’s best to hold off on such an extravagant purchase until your savings are well-cushioned.

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Unnecessary Subscription Services

You might be surprised to see subscription services are on this list. After all, isn’t your $10 Netflix bill more of a necessity than a luxury?

“While they are very common these days and most consumers have quite a few subscription services included in their monthly budget, I would argue most of these services are a luxury,” Kullberg said. “Some — like subscribing to save on toilet paper shipments are fine — but most are unnecessary and eat into your budget month after month. You don’t need to subscribe to every entertainment subscription.”

When you’ve got over 20 subscriptions spanning multiple streaming platforms, software, food deliveries and more, you might be unknowingly spending in the triple digits monthly.

Research from Bango shows the average American shells out $924 annually on subscriptions, putting this expense closer in price to a luxury handbag than you might realize.

If you want more control of your finances, take stock of your subscriptions, trim the unnecessary ones and free up more money in your bank account for future purchases.

Designer Fashion

While luxury fashion pieces hold prestige, most lose value over time — making them an investment you should skip if your savings are still low.

“Until you are debt-free and have a good amount of money in savings, including at least three months of living expenses in an emergency fund, you should not buy designer fashion,” according to Kullberg. “The exception to this rule is if you set a clothing budget and choose to invest in a few good pieces a year instead of a ton of new clothes and accessories.”

If your love for high fashion is at odds with the number in your bank account, consider alternatives. Platforms like ModLux.Rent allow you to rent 5 designer pieces for $125 per month, allowing you to feel luxurious at a fraction of the cost.

“If luxury goods are important to you, you can always buy second-hand, wait for sales or shop discount sites,” Kullberg said.

Beauty Treatments

It’s only natural to want to look and feel your best, but beauty treatments shouldn’t come at the expense of your financial peace of mind.

“Manicures, highlights, eyelash extensions, and other beauty treatments are getting notoriously expensive,” Kullberg explained. “The other problem is many of these services become quite habitual and can really add up month after month.”

Just like subscriptions, regular beauty payments can quickly wreak havoc on your savings. Instead, make saving money fun while still pampering yourself.

Invest in some at-home beauty tools like a quality nail kit or hair-cutting tools to bring the spa experience home without falling too deep into a spending cycle you can’t afford.

Dining Out Frequently

Spending on things like dining out offer short-term satisfaction, but isn’t the wisest financial move if you don’t have a solid safety net established yet.

“Of course, you should feel free to treat yourself for special occasions, but if you are dining out and ordering takeout every week before you’ve established a strong financial base, you need to get in the kitchen and start cooking,” Kullberg said. “One night at a restaurant can easily buy you a week’s worth of groceries.”

This article originally appeared on GOBankingRates.com : 5 Luxury Items You Shouldn’t Buy Before Having $100K In Savings