February 15, 2012

Wants, Needs & Financial Freedom

Warning – this post has nothing to do with sport, unless you`re referring to the addictive habit of buying sports goods. It’s an adaptation from a post I read today and I am pretty sure we are all able to relate to this.

There seems to be a constant battle between what we have, what we need and what we think we want.

We always need more, right? No matter how many bikes I own, there is always another that would “complete” the collection. But when I have cleaned out the garage, so to speak, and ended up with one or two bikes only, I managed perfectly.

One of the most challenging personal finance issues we all face is the ever-expanding definition of “need.” Things we once considered clear luxuries have somehow become necessities, often without any consideration of how the change in status happened. Cars that seemed just fine now seem old fashioned. Then there are children (I hear horror stories of parents feeling like ATM machines because every time their kids approach them its for cash) and their cellphones. Only a few years ago it would’ve seemed outlandish for 14-year-olds to need one at all, let alone the latest iPhone.

Achieving clarity about the difference between our needs and wants remains one of the biggest challenges in personal finance and a tremendous source of potential conflict within families. While simple in theory, the calculation is much more complex in practice.

One of the most discouraging parts of modern life seems to be this never-ending sense that we should want more. While this may not be true for everyone, it does seem like it’s become more difficult to be content with what we have. Whether it’s the media, our friends or even our family, it can be a challenge to separate real needs from wants.

So here are a few of things to think about:

• What if financial happiness is not about getting more but about wanting less?
• What if things start out as wants and become needs not because the thing itself has changed but because our feelings about it have changed?
• What if you can never really get enough of something that you don’t need?

From personal experience, I know that the shiny new toy I just had to have often ends up in a pile of things that I eventually need to sell. I’m not the only one that’s fighting this battle. It’s yet another example of why personal finance can be so complex. Because there’s no definitive list of the 100 things that every person must have, these end up being very personal decisions.

Add in the amazing sponsors to this site who send me amazing goods which add to the pile and it’s easy to see why I dropped off 6 municipal bags of goods and clothing at last year and have just put together 2 more bags.

I’ve talked about some of the ways I’ve seen people look for balance between wants and needs. They include things like sleeping on a decision overnight. My personal rule is that before I buy something, I have to have read all reviews, spoken to an actual user of the product who I trust and gone to test it.

What have you done to help better define the difference between a want and need?

And how have you focused more on being content with what you have instead of always striving for what you think you want?

Anyway, food for thought for my long run later. Report back soon.

Leave a Reply

Your email address will not be published.