1 Simple Practical Financial Lesson To Educate Yourself

1 Simple Practical Financial Lesson To Educate Yourself

1 Simple Practical Financial Lesson To Educate Yourself

1 Simple Practical Financial Lesson To Educate Yourself You are walking thru your favorite store (for me its Menards, as my kids mock me about it).  Walking along you spot the new wireless noise cancelling headphones that were just released are now in stock.  You pick them up and look at the price tag.  I can afford this you say to yourself and buy it.  You go home and you enjoy your new headphones.  Your current headphones that are wired noise cancelling you toss the side and forget about them.  What did you just do?  You justified needing your job.  Was this purchase a need or a want? 

Need vs Want

This is a want, not a need.  People often confuse the two for their convenience to make themselves happy.  They tell themselves they need something when they want something.   Buying something makes people happy…for a fleeting moment till the next better item comes along.  Having two headphones is not the end of the world.   I have two myself, first one was a need for business travel and the second was a want I saved up for critical listening.  

I view a need as something you do not have your life will be truly negatively affected.  Have an interview next week and no suit then the suit is a NEED.   On the other side if you have o interview next week but you see a nice suit in the window, then you WANT a suit.   Your business phone is dying, you NEED a new phone.  Your phone is working fine but the new version is out, then you WANT a new phone.  Some may justify NEEDing a new phone because their friends have it and they will die if they don’t get a new phone.    


Try not to justify a WANT into a NEED as this this perpetual conversion from a want to need will never end. As a result your financial situation fall further behind in the rat race steadily.  Is this completely black and white, no there is a grey area.  I am guilty of this behavior at times as well.  I try to control it by taking a step back and delaying that purchase for a moment, a day or month.  Certainly, one can argue all you need is air, water and food but that really isn’t reality.   

For me I rarely spend more than a penny than absolutely necessary on a WANT but I will spend whatever I need to at that moment on a NEED that gets the situation resolved (I try to still not spend full retail if I can). 


Unbeknownst to my friend he taught me about want and needs back when I was just out of college.  He would impulse purchase toy figurines from movies.   Next he would leave them in the box and never open them in the hopes that they would become collectibles at some time in the future.   There was no lasting enjoyment beyond the split second of transaction, then it was forgotten.  He also was now storing them for some unknown time.   These were for new movies that had just come out, they weren’t even classic movies like Star Wars that could be collectibles.  He ended up selling them only because he was getting married and needed space for his expanding family so he didn’t even make a profit on them.  All for what?  That was just one example.  I thought to myself why?  Have some self-control I thought. 

We all impulse buy, I have done it myself but occasionally.  He was doing it fairly regularly.  Investing that money or spending on some NEED or even simply saving in the bank as an comfortable emergency fund.  He would have been more happier in the long run.  Instead he bought items that he wouldn’t notice he still had them the next day.   He has gotten better minimizing this.  How far did that really set him back on retirement for that glimpsing moment of happiness that disappears as fast as it comes? 

What I do

I teach my girls when they say they want something at the store.  I simply ask them do you need it and do YOU have the money for it.  Most times a no and a no or no and a yes are the answers.  I have taught them if it’s a yes and a yes buy the item, else keep walking.  If the items is something I don’t want to buy I simply just ask them if they have the money saved up that they want to spend on this item.  Most times this gives them pause and not want to buy the item anymore.  They forget about the item faster than I can start to walk away.   

What is really going on

People who crave the buying experience can a justify a WANT into a NEED easily to help them cope with a poor decision that they made or someone has called them out on.  Remember Buyers Remorse thoughts?  We all do it to varying degrees.  When you realize this thought pattern, acceptance settles in that you are doing this and you will change.   Change comes faster now to modify your buying habits towards a positive more value added purchases.   

Purchases now will bring lasting pleasure beyond the first day of having that new toy.   This does not mean depriving yourself.   Higher gratification will result instead.   More value will be derived from what you need and less from what you want. 

Next time you buy something just take a moment and ask yourself is this truly a NEED or a WANT that you are making into a NEED?  When you answer this questions, don’t lie to yourself, your wallet and your future self will thank you for it. 

Control your expenses, control your future.

Action to take now:

 Next time you want to buy something that is not the essentials to your month to month take a step back and ask yourself if you really need or want this.  Try this for a week, then a month then year.   

Go thru your items at home.  For each item that you haven’t touched in a while think back to when you bought the item and realize why you really bought the item.  If the item isn’t being used, can you sell it, donate it or give it to someone else who will better use it?  You will be able to clear clutter out of your home.  Just don’t replace it with some other item  

Post a Comment for " 1 Simple Practical Financial Lesson To Educate Yourself"