4 Reasons Not To Buy Expensive Things, According to Austin Williams
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Peter Burns
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Molly Sullivan
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Whether you want to treat yourself, be comfortable or make your neighbors jealous, spending money on expensive items has its appeal. However, not everyone sees the benefit in buying expensive items. Austin Williams, a personal finance expert and YouTuber, resists the urge to delve into luxury. In a recent YouTube video, he broke down four reasons why he tries to avoid buying expensive items.
Expensive Things Mean You Have More To Lose
One day, Williams recalled seeing a car crash between an old truck and a brand new Porsche. In the aftermath of the crash, the Porsche owner paced back and forth yelling into his phone, while the truck driver casually took pictures of the damage and changed his tire, waiting for the police to arrive. Because the Porsche driver had a lot more at stake, they acted in rage and panic. Meanwhile, the truck driver acted calmly and rationally because the damage to his less expensive truck wouldn’t ruin his finances.
Williams said, “When your things are really nice, you’ve got a lot more to lose.” Owning expensive, luxury items is a dream for many. However, at the same time, protecting those items can take a significant financial, physical and psychological toll on you. Williams said he would rather have had the $10,000 truck and peace of mind than the $100,000 Porsche and the anxiety that comes with it.
Prices Drop Over Time
Whenever the latest model of a smart device comes out, people camp out in line to be the first to buy it. Williams refers to these people as “suckas.” He explained that purchasing an expensive, new item just to have it first is a terrible strategy that costs a lot more than it needs to.
For example, if someone buys a new phone for $2,000 on the day it comes out, that device will drop significantly in value a year later when the next version comes out. Last year, when Apple released the iPhone 16, many enthusiasts who needed the latest phone flooded the market with their old models. This caused the resale value of the iPhone 15 phones to drop by 20% to 30%. Williams sees this as a waste of money and pointed out that if you can be OK with not having the newest version, you’ll spend a lot less.
Expensive Things Might Not Be as Great as You Think
For some, buying expensive goods is a way of guaranteeing the product’s excellent quality and longer lifespan. Williams concedes that this is a good reason to buy something, but also poses the question: “How high-quality do you actually need it to be?”
If you have a spouse and two children and live in a studio, upgrading to a two-bedroom home will certainly improve your quality of life. However, upgrading again to a mansion with six bedrooms won’t have the same effect. While it will still improve your life, it won’t make as big a difference as your first upgrade. Williams explained that the more you upgrade, the more the curve of actual improvement and added value flattens out.
Luxury Traps You
Expensive things can also lure you into a spending trap. Williams pointed out that as you earn more money and begin to buy better things, it becomes more difficult to spend less and go backwards. This idea is known as lifestyle creep. Lifestyle creep is when you begin spending more as your income rises. It can be hazardous to your financial health because you may be stuck living paycheck to paycheck despite making more money.
For example, if you get a big raise, you might decide to upgrade your car. While it’s normal to want to treat yourself, your monthly costs will rise to pay off your car, and you won’t be any better off financially. Also, it’s harder to choose a less expensive model the next time you’re in the market for a car. More likely, you’ll be stuck in the luxury trap and want to get an even better car.
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