Category: Finance

A Failure To Budget And Properly Value An Items Worth.

Is it a want or a need? A question I consistently ask myself when making a new purchase. A question I recommend you ask yourself before any major life decision. I have always been very good at saving. And to properly save, it helps to begin with this question in mind. Saving is just a matter of bringing in more then you are sending out. Many of us want the big immaculate house, the luxury cars, ability to dine at the finest restaurants. The comfort of knowing all our wants and needs will forever be covered. In order to achieve higher aspirations you either must save more or make more.

Some of us may not want any of that but we all know that everyone has essential needs. And those needs are food, clothing, shelter, water and the air we breathe. In survival their is the rule of three. Without air you can only survive about three minutes, without shelter in a harsh environment you can potentially perish within three hours, without water three days, and without food three weeks. These items are the bare essentials. These are our needs, beyond any reasonable forms of these basic items, are where our wants reside. Wants are often socially influenced. Your friend just bought a new car, or house or they remodeled their kitchen and bathroom. Now you feel you need to have a new car, or a new better house. If you can’t find that, surely you’ll feel better if you remodel your current living space. Because the desire to keep up socially is so powerful. Their is a term to this, it’s called keeping up with the Joneses. We have all felt that urge at some point or another. Other then your friends, the media and advertising is another one of the biggest culprits of driving these desires. But I urge you to resist those temptation, it’s all fabricated. You feel the need for more but it’s really just selfish desire. A want masquerading as a need.

We should never ever fund any wants with debt either. You never truly own anything that has been purchased with other peoples money. At least not until those people are paid off. Usually by then your wants have shifted and you have found a new shiny toy that becomes the object of your desire. Sure debt payments may fit your budget at the time but at what cost? Your never free if you owe someone money. It’s a burden that eats a way at you and your savings. Own everything you buy. Buy your with car with cash, pay for travel with cash, pay for all wants in cash, and in doing so you will never live beyond your means. Now a house is a tricky proposition, not many have hundreds of thousands of dollars just lying around and we do need shelter. The question then becomes how much do I really need and can I be satisfied with renting? I always err on the side of caution and minimalism. If your wants and desires drive you into a home where your leveraged to the hilt with mortgage payments. The stress of that payment can do far more damage then settling for something more reasonable. If you want bigger find a way to make more money.

As for clothing, enough to cover your limbs and torso should be sufficient enough. No need for high priced brand names that claim you have more money then your fellow clothes wearing companions. On the subject of water, water is really all you need. High priced lattes and other beverages are simply wants. Granted drinks aren’t going to break the bank and water isn’t necessarily free either but they do add up and it helps to recognize even the smallest expenses have a impact on your psyche, especially when it comes to the last item, food. Food, similar to water doesn’t really have much room for savings, but we can remove the unnecessary excesses we think we need. The chips, the cookies, the soda, all the poor snack foods that don’t add value and usually leave you more hungry in the long run. If you do have bad habits when it comes to food and drink those poor habits may continue into other parts of life, especially when it comes to purchases. Removing them creates a pattern of success that transcends into other areas of your personal growth. Just start with the question, is it a want or a need. If it’s a want, the next question becomes, how can I provide more value in order to afford my desires?



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