As in “I need.”
What prompted this blog was watching an episode of Love it or List it on HGTV. The wife homeowner kept saying she “needed” a huge kitchen, and a much larger master bedroom, while the house was already over 3,000 square feet. The couple had one child and appeared to be at an age where more were unlikely.
She could have said, “it would be nice to have,” or “I really would like.” Instead to get what she “needed” the renovation budget was increased beyond what they said was already their maximum.
I have a car I dreamed about for literally fifty years beginning when I was eighteen. It took me until age 70 to obtain and I saved for ten years in a designated account. I have it, I am happy I have it, but I surely don’t need it. It’s a luxury and I treated its acquisition as such … after meeting other financial obligations and necessities.
The problem is when people can’t or don’t want to make a distinction among needs, wants and desires, necessity and non-necessity spending, immediate gratification and long-term goals.
Do we need to fill our shopping cart with soda and junk from the snack aisle, bakery or deli? Do we really need that new pair of shoes or any additional clothing driven by style and advertising? What about new golf clubs or an updated smartphone? A need?
Some people rationalize themselves into debt. Others are motivated by an unrealistic dream, like those who spend hundreds of dollars a year on lotteries. I’ve heard the rationalization that they do so because it’s fun, it’s enjoyable. Okay, maybe so, but at what cost? What are the tradeoffs these people come to regret?
2020 wasn’t much good as years go, but it was pretty great if you were an investor, even a little investor. If you had invested $1.00 in an S&P Index fund in January 2020, you would have $1.16 today. If you had invested $1.00 each month of the year, you would have even more.
2021 may be a good year to get those “needs” better defined, to reassess financial priorities, to get yourself into a pattern of saving and prudent spending for long-term goals – like more secure financial future.