If you’re trying to get a handle on your lifestyle spending, how do you know which expenses are necessary and which ones are simple luxury?

Lifestyle spending is one of the biggest personal finance pitfalls in the developed world today. Because the costs of covering our basic life necessities is relatively low, we have more disposable income than any other society in history. That income gives us some room for discretionary lifestyle spending. And yet if it’s not tightly controlled, that lifestyle spending can get in the way of doing things like saving for the future or giving to worthy causes.

To really get your finances into shape, it’s important to know exactly how much money you’re pouring into lifestyle expenses so that you can make good decisions. We’ve touched on some of these ideas before in talking about life’s basic financial necessities and spending habits that can bust your budget. Today’s discussion is very similar: Here are 10 common expense categories that amount to lifestyle spending.

1) Fancy Food

It should come as no surprise that restaurants and coffee shops top the list of common lifestyle expenditures. As everyone knows, eating meals or getting coffee out is much more expensive than feeding and caffeinating yourself at home. Though eating is certainly important, any time that you chose to eat out, you’re making a luxury lifestyle decision.

2) Fancy Fun

The kind of entertainment that you spend your money on can vary widely based on your interests and life situations. The list includes buying music and media; concert, movie and theater tickets; sports events, etc. If you have cable or satellite TV, that expense also falls in this category. There’s nothing wrong with any of these things, but it’s important to recognize that they are lifestyle choices and not basic necessities.

3) Fancy Phones

It may seem mandatory to own a smartphone in today’s hyper-connected world (and I’ll be the first person to admit to loving mine). But the world existed thousands of years without data plans, and chances are that you were able to function in life before you had an iPhone. Unless your job requires you to have a smartphone, you should recognize that this is a voluntary luxury expense. And if your job does require you to have this kind of phone, your company should help you cover the cost of the service plan.

4) Fancy Fashion

In their simplest form, clothes are an essential expense that we all must spend some money on. But at some point, spending money on clothing crosses the line from an essential to a lifestyle choice. Here’s how I look at it: You should have enough clothes to get you through about two weeks of any season, as well as a few dressier items for special occasions. Purchasing clothes, shoes, purses, etc., beyond this is fine, but fashion is a lifestyle choice, not an essential.

5) Fancy Cars

Unless you live in a big city with plentiful public transportation, you’re probably going to need a car to get around in life. Technically, the only thing that you need is a basic vehicle with four wheels and an engine in decent condition. Your job might require a specialized vehicle like a truck or a van, and if you have kids, it might be necessary to drive a vehicle large enough to haul them around. But even given all of these considerations, the amount that you will spend on a vehicle ranges wildly based on how nice a vehicle you buy. I don’t have anything against nice cars, but anytime you buy more than basic, that’s a lifestyle spend.

6) Fancy Housing

Everyone needs a place to live, and there are certainly expenses associated with that. Owning a home is certainly an admirable financial goal. But whether you’re shopping for houses or just apartments, it’s good to be realistic about what you need and what you want. It’s easy to spend a lot of money on homes with great amenities located in great neighborhoods. But amenity and neighborhoods are lifestyle choices, not life essentials.

7) Fancy Toys

If you have hobbies, you might have some tools, equipment, instruments, vehicles or other gear related to those activities. Unless you’re using those things to make money, they’re essentially the grown-up version of toys. In a pinch, you could certainly do without them.

8) Fancy Travel

I’m a huge believer in the power and importance of travel (especially because I’m a tourism magazine editor), and I encourage people to set aside some money each year for travel. But I’ll also be the first to tell you that travel is a lifestyle choice. People in tight financial situations don’t need to be taking expensive vacations.

9) Fancy Gifts

Some people enjoy lavishing gifts on their loved ones, and especially their kids. That’s a wonderful thought. But the kinds of presents that you buy for people says a lot about your lifestyle. Expensive gifts are luxury items; simple, heartfelt gifts will do if you’re short on funds.

10) Fancy Education

This statement may not be popular with everyone, but I believe it to be true: Private education for your children is not a necessity. Private schools have their merits — all the way from kindergarten through college — and they can be a great fit for people who can afford them. But private education is extremely expensive, and the decision to send your kids to a private school is certainly a lifestyle choice.

There’s our list of lifestyle spending. Which of these areas do you find yourself spending the most on?

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Photo by Rex Sorgatz. Used under Creative Commons License.