http://blog.allstate.com/needs-wanted/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 its incredibly hard to resist the urge to spend when the right item happens to call your name: A joystick for the original NES system? A slightly-used Titan…Allstatehttp://blog.allstate.com/wp-content/uploads/2011/01/13.jpg
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 its incredibly hard to resist the urge to spend when the right item happens to call your name:
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. Well spend a few dollars here, a few dollars there, and before we know it, weve 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 well 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 were 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 Fizzlecategorized these expenses into 5 different gradients that may be helpful in determining where we should(nt) 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).
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.
As we come to understand more and more about our buying habits, well be better able to anticipate our spending urges, and in turn, well be better equipped to budget for our future.
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