Remodeling This Life

This guest post was written by Peter of Bible Money Matters. Please feel free to visit his site and subscribe to his feed

My wife and I were recently talking about how we need to get a new TV in our bedroom. With the digital switchover happening next February, we have two options to consider. First, we could buy a digital to analog converter box for about $10 after using our $40 government coupon. Second, we could buy a new digital TV for $4-500. After considering it we both decided we wanted that new TV, after all, we’ve earned it right?

We considered the expense over the next few weeks. We asked ourselves, “Do we really NEED to buy a new TV for our bedroom? Or do we just want to buy it out of a sense of entitlement?”.

We ended up not buying the new TV, and instead bought the $10 converter box. The TV works like new, and we saved ourselves a ton of money.

Entitlement blurs the line between wants and needs

The whole experience got me thinking about the sense of entitlement people have in this country today. They want to be able to have everything their parents had, but at a younger age. They want the house, but without saving for a big down payment. They want the fancy car, and they sign up for a 5 year loan at 9% interest. They want the new TV, so they put it on the credit card.

In an article on bankrate.com psychotherapist, Olivia Mellan talks about how people confuse needs with wants:

A lot of us in wealthy, overspending America are either born or raised with a tremendous sense of entitlement. We say to ourselves,”I work hard or, I work at a job I hate — at least I should be able to have a Starbucks coffee every day or eat out for lunch.” But of course, those are not needs, they’re wants. They’re pleasures. 

Wants and pleasures turn into needs because we feel like we deserve it - even if sometimes we don’t deserve it or can’t afford it.

Having a standard of living beyond our income is almost expected these days. Spending has gone beyond the actual needs of food, water, shelter and clothing, and have expanded to include things like a cell phone, cable tv, bottled water, eating out every day and new furniture. The things people enjoy having become needs in their mind, and without them they don’t feel like they’re living to the fullest.

The better off we become financially, the more we realize that true happiness can never come from the things we own. Instead they come from faith, family, friends and through helping others. All other sources of happiness are fleeting at best, and corrupting at worst.

Are you aware of your wants and needs - and how the line has become blurred in your own life? My challenge to you is to keep close track of what you’re spending this month, and see just how much of your spending is on things you want, but don’t NEED.

Avoiding impulse spending on things we want

So how do you avoid impulse spending when you’re trying to save or pay down debt? Here are some ideas that I came up with, along with a few from MSN Smart Spending:

• Implement a “touching and talking rule”: Either touch the item 3
  times, or talk about it 3 times with a spouse or loved one before actually purchasing it. If you still can justify the expense after that, consider purchasing it if it will fit in your budget.
• Wait it out: Wait a while before making a big purchase. Give yourself some time to mull over the decision before dishing out the big bucks. At our house we try to wait at least a month before buying something, and if we still consider it a good purchase, we’ll go
  ahead with it.
• Don’t Buy it, Try it: Try borrowing the same or a similar item from a friend. Try it out and see if it is all you thought it would be. Chances are you may realize that you don’t need that Ipod as much as you thought you did.
• Save up and pay cash: Save for the item you want and pay cash for it. By the time you have enough money you may realize you don’t want it anymore.
• Ask yourself if you really need it: Ask yourself, “Do I really need this? If I get it, will my life be significantly improved? If I don’t get it, will my life be substantially diminished?”

When you think consciously about your purchasing decisions, and actually ask yourself if you NEED the things you buy, you’ll be well on your way towards living a less cluttered and more fulfilling life. You might even be able to save some money in the process.

June 25th, 2008 | Category: Finances | Subscribe to comments | Leave a comment | Trackback URL