Molly Logan Anderson: Needs versus wants
I feel like I'm an intelligent person. I watch commercials and can easily call out advertisers that imply I have problems that need solving. I recognize when my thoughts veer dangerously toward the Jones' latest big purchase and fight to refocus them on my savings. I am certain that I want a life of financial freedom.
But even though I have some financial smarts, that doesn't mean it's easy to put them into practice. The fact is I'm aware of the Jones' and admit I want some of that same stuff. I can easily rationalize something I deserve from time to time and falter just as much as the next guy trying to stay on the financial straight and narrow.
Lately, I've been thinking a lot about determining our needs and wants. With three young kids who need, well, everything, I've been struggling with what actually constitutes a "need." I believe the lines are a bit blurred because sometimes, it can be relative. Here are some thoughts at determining "needs" that go beyond food, shelter and water.
The big picture For some people, it may not make sense to spend as much as we do on kids' activities. Things like gymnastics lessons for my daughter who loves them feel like a need, even in months that are tight. Sometimes it makes sense to stretch the rules a bit, when you can. For other folks, it might be a gym membership, date night or organic food that they can't live without. Nearly everyone can identify expenses that are technically "wants," but they bring so much benefit to the big picture that they elevate to "need" status.
Take a look around Scrutinize your past to see your "wants" more clearly. It doesn't take long to find red flags in your storage areas. Right now, we have enough extra odds and ends to furnish a small apartment for sure. At one point in time, we thought we needed them, but now they sit unused in our unfinished basement. Make note of the items you had to have but never use. Rest assure that many of these things were "wants," not "needs," and beware of repetitive purchase patterns.
Take costs to the board of directors When you're serious about straightening out wayward finances, every penny counts. Many experts advise couples to discuss purchases over a set dollar amount before spending a dime. My husband and I seem to come by this naturally and it works well to keep us on track. Besides normal costs that run high, like groceries, we tend to check in with each other on purchases over $50. Don't think of it as asking permission, think of it as confirming "needs" with your business partner. Financial freedom is a serious business.
Molly Logan Anderson is a freelance writer who lives in the western suburbs of Chicago with her husband, Mike, three kids and black lab.