Balancing Your Income Between Your Needs and Wants
The best time to start saving is while you’re still young. You still have plenty of time to make mistakes and the luxury of time to fix them, along with some bad spending habits you might’ve developed over the years. You also have more opportunity to consider a ton of options involving money early on in life.
However, just as there are opportunities, so are there plenty of distractions that could make it difficult for you to save up. Before you make any more brash decisions or mistakes, it’s best to assess your spending habits.
First off, let’s classify the different types of Wants and Needs.
These are the pretty, eye-catching, and more often than not—expensive things you’d like to buy every moment of every day, if you could. You don’t really need these but if you want to show off signs of your social status or enjoy the momentary convenience they offer. Among these are:
- Designer clothes, bags, and shoes
- Luxury cars
- Latest gadgets
- Taxi fares
- Eating out
- Things you usually want to buy once you see them
Prioritizing your wants may give you instant gratification, but that’s about it. It drains a huge chunk of money out of your savings fund—all for a product or service that won’t benefit you in the long term.
These items aren’t as exciting or attractive to you and often refer to items that are hard to save up for. People often take some of these for granted:
- Emergency fund
- College tuition
- Retirement fund
- Credit card debt
- Things you put off saving for or paying
As you can see, it’s easier to make a list for wants than needs. The list may be short, but these items take a whole lot longer to save for. However, being able to save or spend for these things will definitely make you worry-free once they’re taken care of.
How do you start, for real?
Honestly speaking, it’s easy to “prioritize” because it’s all talk. However, walking the talk is the real challenge. This article could go on and on about why putting your needs first is the best thing option to go for. If you really want to push through with what’s important to you, here’s what you do.
1) You DECIDE.
I don’t know how you’ll manage to convince yourself to WANT to save, but this is the starting point of your savings career. Draw a line here and stand by it.
2) Make it a CAREER.
Consider it an art you’ve to master. You need to start from the bottom, and make your way up the ladder of success. It’s not easy, but you’ll get there somehow.
3) REDEFINE success and happiness.
Being able to buy all your wants and suffering the consequences of those purchases isn’t what success is all about. Those material things won’t ever make you happy—not for too long, at least.
4) SHARE the burden.
Get your family in on it. Tell your friends to help you out. Feeling accountable to other people might help you make better financial decisions knowing they have their eyes on you.
5) Don’t CUT, practice PRUNING.
Going cold turkey seems like it’s more practical, more efficient. Sadly, tough love isn’t going to cut it sometimes. Instead of making drastic changes in your habits, make little adjustments. Walk instead of taking the cab. Start buying in the market instead of going to the grocery store. Live below your means. To do this, you need to:
6) Do the MATH.
If you’re allergic to doing math, the more you need to do it. Start computing how much you spend monthly. Let the numbers disgust you. Let the numbers frighten you. See how much you actually waste away on nothing. Then, you should:
7) Learn to SAY NO.
You’re used to giving in to your every whim every single time. If there’s something that needs tough love, it’s your conviction. Unless you’re the prince or a princess of a certain business empire, you’re not allowed to splurge on clothes, food, shoes, or watches. You don’t have that luxury.
8) Use TIME to your advantage.
Don’t hate how long it takes to save money. Instead, research on the best interest rates banks have to offer in a savings account and put your money there. This will surely benefit you in the long run.
Like any new experience, saving money takes some getting used to. Once you get the hang of picking your needs over your wants, however, rest assured that your future can only be safe, sound, and secure from hereon.
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