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We can’t afford a home, but we’ve got the newest iPhone.
We’re drowning in student debt, but still rocking designer sneakers.
We live in a crummy 2-room apartment with roommates, but we’ve got an 85-inch smart TV mounted on the wall.
It’s easy to wag your finger and say, “That’s why people are broke. They buy toys instead of saving!”
But that’s too simple.
We’ve flipped the economy upside down.
How We Got Here
It used to be that big life essentials (houses, cars, education) were within reach for middle-class families, while consumer electronics were luxury purchases.
Now, a house will crush you under a mortgage for life, while a flatscreen TV costs less than my last trip to the supermarket.
A “big purchase” meant furniture, appliances, or a family vacation every few years.
Electronics weren’t on that list. For multiple reasons, obviously. Not only for the money. But money was one factor. A computer was something schools had, not households. Because they were freaking expensive compared to average salaries.
A TV was a heavy box in the living room, not an 85-inch rectangle mounted on the wall of every bedroom, living room, and kitchen.
But over the past 30 years, the script flipped. Drastically.
Technology got cheaper and cheaper, while the basics of adult life (housing, healthcare, and education) spiraled into pure absurdity.
It’s not that people are choosing sneakers over savings accounts. It’s that the sneakers are the only flex we can afford.
Why not buy a little joy?
The big stuff feels impossible. And it is, in most cases.
We’re not going to save our way into homeownership on an entry-level salary when rent alone eats 40-50% of it. And a car payment, another 25%.
But we can drop $200 on shoes. And feel cool. For a bit.
Cheap Luxury
Flat-screen TVs, AirPods, fast fashion, even international flights at the right time of year, all of these things have dropped dramatically in relative price.
Global supply chains and mass production turned yesterday’s status symbols into today’s impulse buys.
Meanwhile, the “boring necessities” have become financial traps.
Median home prices in the U.S. have nearly quadrupled since the ’90s, in Western European countries it looks similar, or even worse.
Meanwhile, wages have barely moved in two to three decades. Some did, of course. Some industries flourish. But generally speaking… not so much.
We’re broke, because essentials are absurdly expensive.
Feels Like a Scam
This weird trade-off isn’t an accident.
It’s the outcome of an economy built on consumption, of course. We love buying stuff. And we’re constantly nudged toward the purchases that feel good right now because they’re accessible.
We’re to blame, in part.
The system prefers us to be entertained and distracted rather than stable and secure. A citizen with a paid-off house and no debt doesn’t feed the machine nearly as well as one juggling rent, loans, and a dozen subscriptions.
Luxury poverty isn’t about “bad personal choices.”
It’s the logical result of a system where essentials are rigged against you, while non-essentials are cheap enough to keep you happy (for a short while).
What Now?
There are two ways to respond to this reality:
Reject the small luxuries entirely. No sneakers, no gadgets, just beans, rice, and aggressive budgeting. Don’t think that’s plausible.
Recognize the trap, play smarter. If the economy makes the big essentials unattainable, maybe the flex isn’t the new iPhone. It’s building a small cushion of freedom wherever you can. Less debt, fewer commitments, fewer subscriptions, and more happiness in things that don’t cost money.
The Bottom Line
Luxury poverty is the illusion of wealth without the foundation of security.
It’s better than actual poverty, which we have enough of in the world. Let’s not forget that. But it’s still not great.
And I don’t see that changing anytime soon. Unfortunately.