A luxury item is not necessary for living but is deemed as highly desirable within a culture or society.
(9) Luxury goods The term “luxury goods”— (A) has the meaning given such term in section 746.4 (b)(1) of title 15, Code of Federal Regulations ; (B) includes the items listed in Supplement No. 1 to part 746 of such title, and any similar items; and (C) also includes any items so designated under an applicable United Nations Security Council resolution.
examples include smartphones, staff (drivers/nannies/tutors/etc.), non-essential goods and services like spa trips, resorts, purchase of non-essential motorvehicles such as most cars, bikes, boats, etc., video games, paraphenellia...et. al.
Basically if its not critical for your job or the survival of your family.