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.
Don’t Fall into This Trap!
A fundamentally crucial part of the journey to financial well-being is the principal of spending less than you earn. And although there is no single road to financial well-being, that one principal is what sets you up to not only begin creating your wealth, but to also keep what wealth you attain along the way. The reality is that nothing else can happen without following this one principle. That principal holds true whether you make $10,000 per year or a million dollars per year! While the concept is straightforward, if you’re not following it, you just end up living paycheck to paycheck, just barely keeping your head above water. Not only will that keep you from ever creating wealth, but it’s at the very least no way to live. That kind of living only brings about stress, worry, anxiety, depression and other negative emotions.
The way to master the principal of spending less than you earn is that you need to understand and realize the distinction between your needs and wants. For a lot of people, the distinction isn’t always so obvious and when faced with the reality of sacrificing wants for needs, it can also be emotionally painful. With honest examination, you’ll find the things that you feel are needs are actually wants in disguise. Taking a closer look at these differences and how your money is being spent to accommodate them can be an eye-opening exercise in discovering where money can actually be saved.
“If you live for having it all, what you have is never enough.” – Vicki Robin
An important distinction to understand is that needs and wants aren’t the same. As you read that sentence, you’re probably saying to yourself…everyone knows that, right!? And while you might know this intellectually, there is a good chance that you’re not being completely honest with yourself regarding the things that you buy, because you have a tendency to justify in your mind the things you want as something you need. The lines can be a little blurry in the area of needs vs. wants when it comes to your spending habits. That’s why it’s so important to get clear and spend some time to seriously consider taking a look at your current lifestyle and what your true needs are in contrast to those things which are convenient wants. Not to say that you shouldn’t spend money on conveniences, but until you get a hold of your finances, some conveniences may need to be temporarily put on the back burner.
Taking this step by being honest with yourself and drawing a clear line will go a long way in saving you money and allowing you to spend less than you earn. Because not all needs and wants are completely black and white for everybody, it’s a process that has to be done by you, for you. Something that can be a want for one person can be a need for another and vice versa. So, there’s no blanket list that covers needs and wants equally for everyone. As a very simplified example, if you earn your living using a computer, then a computer is a requirement for you (a need), but if you only use a computer to play the most recent on-line games for entertainment purposes, then it’s not. Some of the choices will be difficult, but making sacrifices now will pay great dividends for your financial future.
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