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Needs Vs. Wants
By Daphne | March 28, 2008
Do we need to spend money to make us happy?
You don’t how much or how little you have until you see what other’s have. Is it important to have the same things other people have? This is how trends get started. One person sees what another person has and only sees the good side of it, not the negatives and then decides that he or she has to have it. The jealous person wants what the other has; not necessarily out of love for a particular item or out of belief in a certain cause or lifestyle but because of envy.
Has saving money become the new trend?
All things in moderation. Even though we hear that, it is easy to get sidetracked when you see that there are people who have what you would like or what you think you would like. Instead of focusing on taking care of your needs and possibly some of your wants things go awry. It’s about choices. If you choose to spend an extra $25 today instead of investing it or not spending it you may see that later on you could have really used that $25.
Consumers are holding on to their purse strings a little tighter and are reluctant to spend when they don’t have to considering the price of fuel and food are increasing. These are necessities. Other things that were once considered necessities are falling by the wayside.
How can we determine what is a need and what is a want?
If you go to the Needs vs. Wants Calculator, then you will be able to see what you really spend your money on and how much you could possibly save for the future (retirement or another long term goal). The calculator gives you a good idea of where you can make some changes in your spending. I do find the amount set aside for saving and investment at 5% rather low for my tastes but if you work at a company where you have matching funds or you want to contribute to a Roth IRA then you can still tweak the numbers the way you want.
We don’t need to spend money to make ourselves and others around us happy. To be able to live a moderate lifestyle, take a look at how much you earn, and how much you save in order to have a good grasp of what you can spend on other nonessentials. Then when you see clear figures that show you only have $150 a month extra after necessary expenditures (including investments) you can move forward realistically in your future goals. Without a plan you will not be able to really make a move forward.
Then if you want to be able to buy tickets for special events or save up for a vacation the Needs vs. Wants calculator will be able to help you figure out how long it will take you to save for those goals. The calculator doesn’t include a section for debt repayment but if you use one of the other lines and enter in the amount you pay or want to pay every month this will still work.
If you end up with a negative number then you can see in what area you need to decrease your spending. It may be difficult to see but if you work at it, you can live within your means. It may take a while initially, but your frugal self with thank you.
Topics: March 2008 |