Everyone’s tightening their belts. They know that the only way to get out of their credit hole is by paying off their debt, which means cutting corners, not going out to dinner and shows as often, buying fewer clothes, and getting the generic brand.

Sorry, what was that last one?

Apparently the generics aren’t happening so much. In fact, we’re buying more luxury foods and other home goods than ever before. There was a good article in the Atlantic Monthly recently called Home Economics, where researchers found that while people are spending less on pamper-me stuff outside the home, they were spending tons more on luxury materials INSIDE the home.

So instead of going out to a restaurant for a nice steak and a glass of wine, those same consumers go to the grocery store and lay down a fair chunk of change for some filet mignon and a nice cabernet to take home and make themselves. When you think about it, it’s a marked improvement. You can have your delicious food without that condescending waiter or that guy at the next table talking too loudly to his disinterested girlfriend about his many business conquests. Not bad at all.

Now, the idea is that all of these consumers are still saving themselves money. If you usually spend $100 on a nice meal and wine for two at your favorite restaurant, and the same meal components cost you only $60 to buy at the store, you’ve saved yourself $40 that you can then use to pay off your credit card debt. Rinse and repeat and you’ve got a nice little debt reduction strategy that you can gloat about over those homemade gourmet meals, right?

Not necessarily. The problem is that many people don’t actually budget precise amounts. They see a luxury item that they want (steak) and think, “Well, we stopped eating out, so we can afford to do this.” And that’s true. Unless they start indulging at home even more frequently than they once did out at a restaurant. In which case they may wind up spending more than they used to when they were gadding about painting the town red.

Our food example is simplest, so let’s stick with it. If you usually eat out once a week, and instead you substitute the homemade gourmet meal, you’ve saved yourself $40 by our count, right? Except since you’re not going out to eat, you think that you’ll indulge a little more often, because why should you have to live like a peon just because the budget is tighter these days? So now you do your luxury meal thing twice a week.

Every at home luxury meal costs you $60, remember. Every night out used to cost you $100. If you bump up your luxury meal to twice a week, you’re actually spending $20 MORE every week than you used to. You might as well go back to going out every week – it’d be cheaper.

So what’s my point?

Deciding to indulge at home is no big deal – in fact, it’s a great idea, since it can still give you that nice luxurious feeling while still allowing you to set aside extra money every month to put toward improving your credit. That said, you should sit down and crunch the numbers. Make sure what started as a money-saving idea doesn’t turn into just as much of a cash sink as the indulgence you just got rid of.