There’s something for virtually everyone in this consumeristic society today. Certainly, many of us might have the intent to budget and save money, but it’s incredibly hard to resist the urge to spend when the right item happens to call your name:
A vintage copy of Stadium Events for the original NES system?
<nasally laugh>... “000h snapz0rz! 7h1s is 7074L 4w350m3n355 ! 1’v3 b33n l00king f0r this f0r y34rs!” <snort snort>
A slightly-used Titan 1 Missile site?
“Chyeah…duuuude, who doesn’t need one of those?”
The latest in designer-brand fashionista footwear?
“OmGoMgOmG! tHosE R lyke, soOoOooOoO nExT sEasON!!! WhErE oN eARtH dId u fInD tHeM?! I aM lYke, toOoOotuLLy goNnA gEt myslf a pAir aS soOn as dAdDy lyke, giVez me his creDiT cArd lolololololzzzz xoxoxoxoxo <3 <3 <3 <3 <3”
Oftentimes, it can be quite difficult to track all the different places we spend our money on a daily basis, much less weekly or monthly. We’ll spend a few dollars here, a few dollars there, and before we know it, we’ve accumulated quite the tab for ourselves. The commercials and ads all tell us that we absolutely HAVE to have the latest and greatest, or that we’ll never be as hip as the Joneses next door. And with tantalizing offers of “Low interest rates!” or “No money down!”, many of us fall into convoluted agreements or loans that we’re unable to pay off.
So how do we mitigate this inherent urge that so many of us have to go out and BUY, BUY, BUY? How do we go about cutting out the extraneous purchases in our lives, and instead spend the money on the things we really need?
A common practice that many factor into their budgeting is separating needs from wants. The distinction between the two may sometimes be a little hazy, however. A recent article from Fiscal Fizzle categorized these expenses into 5 different gradients that may be helpful in determining where we should(n’t) spend our money:
- Life-and-Death Needs: Includes items without which we cannot maintain life. Examples: Emergency health care, groceries (last time I checked, there was no magic food pill).
- Basic Needs: Basic life needs that are “enablers” – in other words, they allow us to perform our other daily duties like working, having kids, and basically “existing.” Examples: Housing payments and maintenance, Automobile expenses, required insurance, basic clothing, taxes (unless you prefer a jail cell).
- Extended Needs: Items that are not absolutely required for basic existence, but make life much easier. Examples: A home phone and/or cell phone, non-essential insurance, saving for future needs, payments on loans.
- Life Enhancers: Expenses that “make life worth living.” No matter how much money you earn, it’s no fun if you can’t spend at least some of it on things you like and that make life enjoyable. Examples: Entertainment (including cable, movies, dining out ,etc.), travel expenses, non-basic clothing, pets and associated expenses.
- Free Spending: Everything else we can blow money on, neither required or necessary to enhance our lives. Examples: Impulse buys, things we never use, mindless entertainment like binge drinking, etc.
(Full article: http://www.fiscalfizzle.com/2009/06/needs-wants-budget/)
As we come to understand more and more about our buying habits, we’ll be better able to anticipate our spending urges, and in turn, we’ll be better equipped to budget for our future…
OmgawWwWwwWWwsh iz it BOGO seASon aLreaDY? G2G now ttyl bai! LOLZ
Photo Credit: http://www.flickr.com/photos/lululemonathletica/4309867048/ / CC BY 2.0