Anybody who has kids, or who has witnessed a family with the kids in tow at the supermarket, will have heard the heart-rending cry “But Muuuuummmm, I neeeeeeed it!” The angst of this cry makes you sure they are referring to something fundamental to the continuation of their life – their limbs, food stuffs, basic clothing or perhaps even some school supplies.
Not likely.
Whenever I have turned around, the item in question is invariably some brightly coloured plastic item. Generally, it is almost impossible to ascertain its purpose, often because it doesn’t have one. These are at their most pervasive in fast food chains, who manage to make their food even more appealing to children (like that was necessary) by accompanying the sugar coma with a toy.
Don’t get me wrong, I succumbed to the “toy with purchase” ploy as a child and loved that item with all my heart for the next hour or so, after which it was thrown into the pile of all the other plastic junk that I didn’t really want but somehow had to have.
Luckily my parents managed to rein in our desperate need for consumer items that almost always ended up in the rubbish. This is despite how hard the shops, the TV and every piece of advertising within eyeshot made it for my parents. This childish approach is understandable, as kids really only know that they desire; they haven’t yet learnt the difference between what they want and what they need.
Unfortunately, as we became adults, many of us still never learnt this distinction.
Put simply, needs are things we have to have, whereas wants are things we would like to have.
There are some very obvious items that fall into the NEED category:
Housing
Basic clothing
Sustenance
Warmth
Transport
Medical care
These are required in the day-to-day process of getting up and about, of earning a living and of staying healthy.
For most people, there are also items that fall very clearly into the WANT category:
Music
Entertainment
Holidays
Fashion items
Convenience food - takeaway or at a restaurant
Jewellery
Sport
Wants are healthy, and are a part of living rather than merely existing. In fact another way of looking at wants is to imagine that we would say ‘I wish I had . . . ’. These items aren’t vital, however they certainly add some enjoyment to our day to day. However, the danger comes when we try to justify the item we just purchased, and the amount we paid for it, and we find ourselves using the words “but I needed it”.
For me, the cinema, DVDs and Blurays fall firmly into this category. There is nothing in my life that would stop functioning if I never owned or saw another movie. I would be able to get to work and function well, I would remain healthy, I could relax on the weekends and I would have the cupboards full of movies I already own to entertain me should I get bored.
However, every time I feel myself wandering into the DVD store (in Australia, my dealer of choice is JB Hi-Fi), and spot the latest movie release, my Want Demon rears her head.
“You’ve been working hard”
“You need to relax and take some time out for yourself” “It isn’t very expensive, what’s the big deal?”
And that evil demon turns my WANT into a NEED.
Your want demon – what type of wanter are you?
This is not something to be ashamed of – we all experience it to varying degrees.
To be fair, there are some people way down the other end of the spectrum who struggle to find things they want, being quite satisfied with where things are at and what they have. My husband drives me nuts in this respect as, whenever it comes to buying him a gift, he invariably responds that there isn’t anything he “needs”. Seriously? His work shirts are fraying at the edges and his toes are coming out of his socks, and there’s nothing he “needs”?
The response to the birthday gift question is an interesting one and can give each of us some insight into how pervasive our Want Demon is. In my experience the broad categories are:
Minimalist – You struggle to think of anything you might want, and even when suggestions are made your response is that you don’t “need” it.
Focused Wanter – You have a short but concise list of things you would like, you have had the list for some time and items are only added to it when you find yourself revisiting the item frequently over time in the stores or online.
Functional Wanter – You have a longer and quite detailed list that gets added to all the time. However, the list often gets lost and when you do a new one it looks quite different to the first list.
Want Addict – You don’t have a list; however, when wandering past shops you can identify loads of shiny new things you’ve never seen before but would love to have.
I have to admit that most people are in the third or fourth categories. This is only natural as, with the advent of easy-access credit, we don’t need to cogitate on how much we want an item because, whether we really want it or not, it is immediately accessible. We have lost that filter that says “Yes, that thing is new and shiny, but what exactly do I plan to do with it?”.
Even worse, we don’t balance that item up against something we would really love, like an overseas trip with a partner. In our head, our lack of savings due to overactive “want spending” is in no way linked to our inability to afford a wonderful holiday.
Figuring out your wants vs. your needs
To get on top of this we need to break your broad spending into:
Needs – rent, mortgage payments, insurance, core food supplies, basic clothing, etc.
Actual Wants (short term) – these are things that you love doing that you would prefer not to do without, and might include things like organic fruit and vegetables, dinners out, cappuccinos at work, etc.
Actual Wants (long term) – holidays, experiences, new cars, etc.
Waste–these are items we spend on that never even get used or enjoyed. Naturally food can fall into this category, but other things can too.
Childish Desires – these are the fillers, the items bought that give a short term burst of enthusiasm but are forgotten quickly. In fact, for many people they can’t even remember they bought them at all within one week of their purchase.
Unrealistic Desires – are you trying to live a Ferrari lifestyle on a Ford income?
Needs
So, let’s go through this one at a time.
As mentioned earlier, needs are the requirements of our day-to- day life, including housing, basic clothing, food, transport and medical care.
If you’re stuck deciding whether one of your expenses is a need or a want, take a moment to think about whether you could survive without it. Yes, we need clothing to keep us warm and dry, or to protect us from the sun, but it doesn’t need to be Gucci or Versace. Likewise, we need to be able to get around, but we can get around in public transport or a basic car, it doesn’t need to be a chauffeur- driven Hummer (no matter how much we’d like it to be!).
Actual Wants
Your wants are anything that doesn’t come under the “need” category. These might be upgrades, like organic food versus the regular stuff, designer clothes versus basic ones, or a house closer to the city versus one on the fringe.
Wants can also be extras, including objects like jewellery, Blurays and gadgets; or experiences like a round-the-world trip or an expensive night out.
The trouble is figuring out your Actual Wants versus Childish Desires or Unrealistic Desires. Actual Wants embody careful thought and reasoned intention. You either automatically include them as a day-to-day requirement to function, or you have thought about why you might want them and how they make you feel. You desire them consistently, whether you walk into a shopping centre with shiny “sales” signs up everywhere or not. Think like a Focused Wanter – your list should be fairly short and should list things you’ve wanted for some time.
Short-term Actual Wants are lower-priced items, like gourmet food, massages or movies, which you thoroughly enjoy, and may even incorporate into your spending on a regular basis. Long-term Actual Wants are high-priced items which require more planning and saving, like a new car or a holiday.
Going through this process can be quite a surprise, and can actually be quite invigorating. Some ‘ah-ha’ moments I have witnessed are:
A retired couple who had talked for years about going on a cruise, but who felt they couldn’t possibly afford it. They downsized their home, which they had always felt was too big, and managed to save enough money in the following 12 months to go on a beautiful cruise around Canada.
A young couple who realised that renovating their home in the city wasn’t going to deliver what they truly enjoyed. Almost all of the moments they treasured were at a great holiday home that they rented with their friends and family each year. They are now simply doing what they need to their city home and are working towards buying their very own holiday retreat.
A young professional who desperately wanted to work (and play) in New York. She had always thought the risk of leaving Australia and arriving in New York without a job was too great, and had simply waited, hoping her employer would eventually find a way to send her there with the company. By realising that the barrier to her move was not having a financial fall-back, she saved hard and managed to build enough in savings to fund her in New York for at least six months. She is over there now and loving it.
Waste
Waste is such an important topic that I’ve devoted an entire rule to it, which I’ll introduce you to in Rule #4.
Childish Desires
Unlike Actual Wants, when it comes to Childish Desires, there is very little thought or planning. It is all about feeling, and a momentary feeling at that. A quick buzz, a lazy spend or a complete separation from reality, these items can often be as much about how they make you feel about yourself versus others. This is a slippery slope, and it’s probably not a great idea to spend on something because your immediate circle might think more of you. Childish Desires are really a symptom of not having direction. When we don’t think carefully about what we truly want, then any new thing will do, and the shinier the better.
A careful combination of a clear goal and some well-thought-out spending is what is required to stop this type of frivolous behaviour.
Unrealistic Desires
Dreaming big is a fantastic part of moving forward in life, however, that is not what we are talking about here. We are talking about ignoring reality.
I hope that if you had a couple of items in this category that you can acknowledge that they are completely out of place. Living pay cheque to pay cheque yet frequently buying designer handbags or shoes for thousands of dollars would fall into this category. The only response to this behaviour is TO STOP. Put one of those items on your Long Term Want list if it truly brings you happiness, however stop living a champagne lifestyle on a wine cooler budget.
I know that this doesn’t seem fair. You might look around you and see other people enjoying the things you want and feel that you have as much right as they do to them. In many cases, you are right. It’s not fair that they get to have the things you want, and you don’t. However, life isn’t fair. Ask someone diagnosed with cancer, a parent who has lost a child, or a family who has run from their war-torn homeland. Life may not be fair; however, it is also what you make of it.
No more head in the sand. No more wishing it wasn’t so. Let’s get on with DOING.
Some of us may have momentarily been caught up in some bad behaviour, or even have experienced a downturn in our income that means we need to make an adjustment to our reality. This stuff isn’t easy, but by facing it you can truly take steps to move forward. The next step is to drill down and identify the parts of your life that need tweaking and then take ACTION.
You are not the first, nor will you be the last, person to attempt this. Take a crack at it, and should you fail the first time, then you are simply one step closer to getting it right.
You can do it!
Tackling your Childish and unrealistic Desires
If you are committed to changing your financial future, then the way to attack this is from the bottom up. Take a look at each category and see whether you can identify items that fall into categories 4, 5 or 6.
If you can, then good on you! Admitting the problem is the first step to solving it.
So what do we do with our new list?
Well, first of all you focus on the way out and wacky stuff. What do you buy on impulse, or to keep up with your social circle? Which spending habits consistently mean you have nothing left at the end of the month? Can you cut these out, or find more budget- friendly alternatives?
The first step is to become aware. The second is to take action, so think about how you might catch yourself before you spend - is it by having a strict Short Term and Long Term wants list? Is it simply by delaying when you can spend on these items?
Our aim is to move you from the Want Addict stage up to the Focused Wanter where you truly enjoy the things you purchase, but almost never buy things that you have never noticed or been aware of before.