by Bola Sokunbi
As we all already know, 2020 has been quite the devasting year.
We are living through a pandemic that has affected every single aspect of our day to day living.
Small businesses are struggling, unemployment is at a record high and there is not yet a confirmed vaccine or effective cure in place to tackle this virus.
Our mental and emotional health as well as our social interactions and relationships are being affected on a daily basis and even simple activities that we ordinarily would never have thought twice about, for instance going to the grocery store or giving a friend a hug, are now such a big deal.
As human beings navigating a difficult season, it’s only natural for us to tune into our coping mechanisms. For many, this means finding a happy escape no matter how temporary it might be. It could be self-care, cooking, gardening, or even luxury shopping.
However, given the uncertainty we face, many are contemplating whether they should be spending money on non-essentials right now.
If you are reading this article on Pursebop, you likely, like myself, have a love for luxury handbags. And some of things you may be contemplating whether or not to spend money on right now may include the handbags that have been on your wish lists.
So, let’s talk about this specifically: “Should you be spending money on luxury handbags during these times of financial uncertainty?”
The answer? It depends.
When it comes to spending money on luxury right now, there are few questions you want to be able to confidently answer before you decide to purchase your next designer handbag.
1. Do You Have an Expanded Emergency Fund?
Having an emergency fund especially in this climate is more important than ever. In a normal world, the typical suggestion is to have 3 to 6 months of your core expenses put aside in the event of an unplanned life situation like a loss of income.
And by core essentials, I mean having money put aside to cover, food and medicine, housing costs, major utilities and any transportation needs.
However, since we are living in unprecedented times, it’s a smart move to expand your emergency savings to 6 to 12 months if you are able to. Basically, the more you can put aside for unplanned circumstances, the better.
2. Are Your Sinking Funds in Place?
Simply put, a sinking fund is money that you set aside for one time or irregular predetermined expenses. It could be money for an upcoming expense for a routine car maintenance or new tires or for a home repair or even a vacation (hopefully we can all travel soon!).
Having these funds put aside essentially allows you to plan ahead for the expenses you know are coming up. You could even have your handbag spending put aside in a sinking fund!
3. Do You Have a Sense of Job or Income Security?
One of the main concerns people have right now is job and income security and it makes sense because being employed or having your business running smoothly is the basis of livelihood for so many.
If you have any concerns about job or income security, prior to any non-essential spending, you certainly want to focus on saving money to bulk up your emergency fund as well as your sinking funds in the event that your income is impacted.
Having this money put aside can give you financial peace of mind while you work on other income strategies and wait for things to get better.
4. Do You Have the Right Kind of Insurance?
The right insurance coverage can potentially save you a ton of money in the event of an emergency, unplanned life occurrence, or a medical need; and given current circumstances, this is really important.
You should definitely review your insurance policies to ensure you have the right coverage include health insurance and auto insurance.
Other insurance policies you may want to consider adding on if you don’t already have them include life insurance, homeowners or renters insurance, long term disability insurance, pet insurance (for your furry loved ones) and personal article insurance (for those luxury goods!).
5. Finally, Ask Yourself, “Am I Really Comfortable Making This Purchase in This Season?”
At the end of the day, even if you have all the above-mentioned items in place, the decision to spend money on a luxury handbag ultimately depends on how comfortable you feel spending that kind of money.
If you are comfortable with it, go ahead and enjoy your splurge on that beautiful bag.
If you however have any doubts whatsoever in your mind, it’s ok to wait on your next purchase. There will always be another beautiful handbag waiting for you.
About the Contributor:
Bola Sokunbi is a Certified Financial Education Instructor (CFEI), finance expert, author, speaker, and founder of Clever Girl Finance (https://clevergirlfinance.com), a financial education platform and community for women empowering them to achieve financial wellness and live life on their own terms. Today, Clever Girl Finance is one of the largest personal finance platforms for women in the U.S. In addition, Bola and Clever Girl Finance have been featured by several media outlets including Time.com, Money Magazine, CNBC, Forbes, Fast Company, Essence, Black Enterprise, Cheddar TV, ABC News, Good Morning America, BBC, Fox Business and The Chicago Tribune as well as on several other finance websites and podcasts.
Updated: July 14th, 2020