Part of our journey to financial well-being is the principal of spending less than we earn. And although there is no single road to financial well-being, that one principal is what sets us up to not only begin creating our wealth, but to also keep what wealth we attain. That principal holds true whether we make $10,000 per year or a million dollars per year! While the concept is straightforward, if we’re not following it, we’re living paycheck to paycheck, just barely keeping our heads above water. In order to master the principal of spending less than we earn, we need to understand and realize the distinction between our needs and wants. For many of us, the distinction isn’t always so obvious and when faced with the reality of sacrificing wants for needs, it can also be emotionally painful.
First, it is important to understand that needs and wants aren’t the same. As we read that sentence, we say to ourselves…everyone knows that! Again, while we might know this intellectually, there is a good chance that we’re not completely sincere with ourselves with regards to the things we buy. When it comes to our spending habits, it’s important to get clear and spend some time to seriously consider taking a look at our current lifestyle and what our true needs are in contrast to those things which are convenient wants. Taking this step will go a substantial way in saving us money and allowing us to spend less than we earn. Not all needs and wants are completely black and white. What can be a want for one individual can be a need for another person. For example, if we earn our livelihood using a pc, then a pc is a requirement for us, but if we only use a pc to play the most recent on-line games, then it’s not.
When we take a close, hard and honest look at the things that we consider to be needs and wants, the choices and decisions may not, and in some cases, will not be easy. The things we thought were needs and are realized as wants, now have to be put off until we get ourselves to the place where we can responsibly spend the money on purchasing those things. By taking the necessary steps toward adjusting our spending habits now, with patience, over time, we will be able to attain the things we want without the constant stress and anxiety of how we’re going to take care of our needs. As the saying goes with regards to physical health, “an ounce of prevention is worth a pound of cure” can also go for financial health. Making some sacrifices now in the short term will be worth the financial freedom we’ll gain later in the long term!
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