DO you NEED it or do you WANT it?
Absolutely essential to the resetting process is a firm understanding of NEED versus WANT. In the first part, I talked about "necessity" expenses. However, you will find that even the necessity expenses sometimes are a combination of a need and want expense. For example, you need transportation, but you may want a car. The purchase of a car may totally be justified and actually be the best mode of transportation for your situation (thus elevating the item to the need category), however, what type of car? Do you need a Porsche?
Please remember the description for my blog, "This blogs provides information, tips, and strategies to help you live WELL by living frugally and making your resources S-T-R-E-T-C-H." I am not advocating a vow of poverty. However, when your decision to purchase that Porsche (or whatever) has put you into financial despair and now takes a toll your life, are you living WELL and was it worth it?
Unfortunately, until you begin to properly see an item for what it is - a want item versus a need item, you will be enslaved by your emotional spending habit. Once you have begun to understand the difference between NEED and WANT, you will regain control over your financial life because YOU will dictate when you will purchase the WANT item. Remember, you are more precious than an object. I truly hope you will stick through this process and work out of the financial swamp you may be in right now.
Thus, as you go through tracking your expenses, ask yourself the following question:
1) Is this something the average person in my society (versus social group) needs to have to live the average life. (I use the term "average" not in the sense of mediocre but in the sense of not an extreme - not dirt poor and not champagne and caviar.)
Again, you will find that except for a handful of items, most of what we buy are WANT items.
2) For this WANT item, why do I WANT it? Are the reasons for WANTING this item healthy.
The issue of whether or not something is "healthy" is a loaded question and incredibly complex. I know I could spin off on this topic and go into a very philosophical discussion. However it will not get you any closer to your goal so let me give you my rule of thumb - I ask myself: is it loving, is it charitable, is it encouraging, etc. Those are good qualities and healthy. However, remember that sometimes wolves come in sheep's clothing. For example, you may have a spending habit of "treating" others and although you may be viewed as a generous, kind-hearted person, ask yourself if you are "treating" others because you want them to like you? If this spending habit arises out of your need for approval, it is unhealthy and most assuredly you will find yourself not only deeper in financial debt but emotionally unstable.
Keep asking yourself - WHY DO I WANT TO BUY THIS ITEM. You may be surprised but at the very end of your search you may find that your answer may simply be - "because I like it or because I want to." Frankly, I have no problems with this type of spending (are you surprised) as long as the funds come out of YOUR allowance budget. It is when you make the purchase on that reason despite (1) despite it causing marital discord, (2) going into debt, (3) causing you anxiety about repayment, that it becomes a problem.
Remember, we are still in the pre-Budget activity phase. Just like in dieting, there is no magic pill/budget that will immediately transform you. If you are reading this because you need financial help, only a mindset change will be successful.
In Part 3, I will discuss how to create a budget.
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