Money Saving Basics: Control your Wants, Limit Your Needs

by David Bakke

spendlessmoney3During my escape from my own personal financial hell that I created, I can only imagine how much faster the process would have gone had I had the ability of hindsight.

Because as I was digging myself out, I was really just making stuff up as I went along. Looking back on it now, I am starting to formalize some of the concepts that I came up with.

As I see it, your financial life is made up of two basic things: your wants and your needs. Fairly simple, right? Your needs are what you need to survive, to get through life. This would be things like food, a place to stay, a car to drive, etc.

And the second category would be everything else. Let’s face it, if there is something that you don’t “need” in life, and then by default it becomes a “want”.
Well, the beginnings of financial health come from defining and managing these two categories. How can I control or manage my needs, you ask? Well, it is possible. For example, food. You need food to survive, but if you could cut your weekly grocery bill by 25%, then wouldn’t that be limiting your needs? And I am not talking about cutting it by buying less food; I am saying to purchase the same food more economically.

And you could apply the same theory to your residence, and the car you drive. Of course, these two are a little more difficult to do, so when trying to limit your needs, let’s just focus on the ones that are easier to adjust. I would say that electricity and water are needs to, correct? Well, if you could decrease your power bill by 15% and take $100 off of your monthly water bill, then that would be limiting those needs too, right?

Regarding your wants, this is the part that takes things like willpower, willingness, and desire. And some actual sacrifice. The good thing that I realized during my journey is that not ALL of getting financially healthy is about sacrifice and giving things up. The whole first part of this post has nothing to do with sacrifice; it has to do with using your money in a wiser fashion. When I realized that, it made the sacrifices that I had to make easier to accomplish.

So, we need to control our wants. How to do that? The first way is to ask yourself that one simple question before making just about any purchase: “Do I really want this?” I usually ask this to myself for anything over $25. Certainly, a lot of purchases are “needs’ where you would ask yourself a different set of questions (Can I get it cheaper? Do I really need it?) But for purchases, you need to really decide whether you want it or not. Better yet, ask yourself if it’s not possible to get by without it for a little longer. This question usually turns me in the opposite direction. If I still feel that I want it the next time I think about it, then I usually go through with it. But most of the time this desire just fades.

I know this was quite a “theoretical” post but another important lesson that I learned during my journey was that by applying a little “theory” to the process, you can see more results in a shorter period of time. Anyone can come up with an ABC list of things to save money on, but by applying a little theory and changing your mindsets towards your money and about your money, you’ll be driving a lot faster down the road to financial freedom than you ever thought possible.

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