NEEDS VS WANTS: The Wall of Financial Decisions.
Once you’ve determined that you have to take control of your financial situation—you will find yourself running into the wall of financial decisions. In a previous post—-Basic Budgeting: When You Are Broke, you discovered how to start sorting out your Income and Expenses. Now we will take it one step further–NEEDS VS WANTS.
First off, everyone has 2 basic universally accepted NEEDS—Housing and Food. Those were beginning to be addressed. Remember, it is perfectly okay for 35-65% of your monthly income to be put out towards Housing Expenses such as Rent/Mortgage, Insurances, Taxes, and Utility Costs. After all, you probably spend 50-75% of each and every day there.
Next you need to set aside 16-18% of your monthly income for your Food.
35-65% – Housing
16-18% – Food
After this, you need to address your other monthly purchases or bills and determine—
are they NEEDS or are they WANTS ??
What is the difference? Well, NEEDS are basically—HOUSING, FOOD AND CLOTHES. Pretty much anything else can be listed as a WANT. Although this list of WANTS can run in varying degrees of priority—they can be lived without for the most part if it really comes down to the hard financial crunch.
One NEEDS category—CLOTHES–can be trimmed financially HUGELY– (in fact you can get this down to almost $0 for the entire year if you really want to) –thus freeing up money for other items by making use of various agencies and their programs in your community. Programs such as Free Stuff 4 Daily Needs, Salvation Army Thrift Stores, SalMart, Hope Chest, Growing with Giggles, Value Village, Consignment Stores, or The Nest. There are also clothing sharing programs in many churches, Great Beginnings, and even between other parents and friends. Some of these will be FREE programs, while others will be at reduced prices over buying new from retailers.
Check them out
Make use of them
Give back to them, and
FREE up some of your budget money for some of the other things you might WANT!
WANTS can include everything from home phone, cellphones, internet, computers/tablets, cable/satellite, flat screen TV’s, tattoos, piercings, new furniture, etc., etc.
If you have determined, for instance, that a vehicle is a NEED for your family—the NEED has to be further refined in definition. You do NEED affordability, gas efficiency, reliability, etc. Maybe you might WANT a certain model or type, but hey, we can’t all drive the Ferrari. The desire for that vehicle is a WANT, but you might actually NEED a minivan.
Even buying a vehicle at a cheap price is not a bargain if it isn’t reliable.
However, if a WANT is hurting you from keeping a NEED met—then get rid of the item you WANT.
NEEDS ALWAYS WIN OUT OVER WANTS !!!
NEEDS ALWAYS WIN OUT OVER WANTS – for example: Your son desperately NEEDS a pair of shoes because the only pair he has is full of holes and is too tight on his toes, but you WANT to get your tongue pierced, and you only have $20.
Do you?? –
A. Buy the child some shoes?
B. Get your tongue pierced because that would be so cool
C. Get your tongue pierced and then borrow $20 from a friend or family member to buy the shoes? (promising to pay them back next month of course.)
Obviously the only correct answer is (A). Get the shoes now because your child NEEDS them and get the tongue piercing you WANT next month if there are no other NEEDS to be dealt with then.
NEEDS ALWAYS WIN OUT OVER WANTS
There is something you WANT—but only AFTER paying HOUSING, FOOD, and making sure the basic needs of you and your children are covered—can you pay for that item you want so bad in CASH? If not, save up for it and get it later.
AVOID CREDIT CARDS AND RENT-TO-OWN COMPANIES—we’ll discuss these another time.
“I know both how to be abased, and I know how to abound:every where and in all things I am instructed both to be full and to be hungry, both to abound and to suffer need.” – Philippians 4:12 KJV
So, there you have it, the basic differences between NEEDS VS WANTS.
NEEDS ALWAYS WIN OUT OVER WANTS !
WANTS are anything else.
Now your list of WANTS will be different from your neighbor in both what they are and how important they are to you and your family. Some people can easily live without something that another family can’t seem to breathe without. For instance, we do not have the internet, cellphones, or even cable or satellite. We have a rotary dial phone and an older style answering machine. We do not pay for any extra phone services such as call waiting, call display, or message services. When we need to access the internet to do things such as check Facebook messages, email, or even publish this article—we use FREE Wi-Fi services that are widely spread out throughout the community.
Why pay for it when it is FREE ?? See, we probably have a different list, and different priorities from you and your family.
So sit down and make those WANT lists and prioritize. Which are at the top? Which ones are the most important—after housing, food, and clothing?
Now you know what else you can look at budgeting into your household finances. For instance, you WANT the cellphone—shop around for the best phone plans—what about prepaid or pay as you go plans? More financial decisions—but ones that put YOU in control of how best to spend YOUR money.
YOU can climb that WALL OF FINANCIAL DECISIONS !!