I have moved house twice and both occasions have taught me a life lesson that have changed the way I now approach my finances. Each time I was looking for a place, I would set a budget to limit how much rent I was willing to pay per month based on how much I felt I could afford. The apartments I saw and wanted seemed to always be over my budget and viewing a couple of apartments I decided to readjust, I mean increase my budget a bit to be able to afford the place I wanted. House hunting exposed a financial mistake that I kept making, time and time again. A phenomenon I battle with on a daily basis – allowing my need transforming into a want.
Sure it is obvious that in life there are things we want and things we need. But the contrast between the two is sometimes blurred and we cross it without realizing it. I need a place to live, but I’d like it to be a modern day apartment, decorated with the nice furniture and gadgets. I need to transport myself to work, but I want to drive a nice looking car with all the nice features in it. I need to eat, but I love to order in most of the time or eat in nice restaurants. I need clothes to wear but I want to update my wardrobe ever so often with the best brands. Take my situation for example, I may have needed to move apartments for whatever the case may be. I set myself a budget which was to ensure that after my move, I would still be able to save at the end of the month. But I allowed my need to evolve into a want when I began to overreach for the nice apartments that were over my budget rather that concentrate on what I could afford. Subsequently this greatly reduced and limited how I could save after bills were paid. In fact for a while I was not paying myself first (check out previous blog on paying yourself).
In no way I am I suggesting it is a bad idea to live in a nice accommodation, drive a nice car, update your wardrobe etc. I’d love to do and have those things. I am suggesting that sometimes the reason why we may be struggling financially is because sometime we knowingly or unknowingly allow our needs evolve into wants with massive appetites that devour what’s left of our income after expenses are paid, especially at those moments when we really needed to take care of our needs first. These days when I have to make decisions and the line between my need and wants seem to blur, the following points and questions help me stay focused to that point;
- Rome was most certainly not built in a day. One of the most difficult things to deal with in society is not having when everyone else (or at least most people) around you has. This can birth in us the desire to ‘balance the scales’. We forget that some people have is built their luxurious life style on a very unstable financial foundation. For others it has taken perseverance and hard work to get to where they are to be able to afford what they have and we sometimes want to skip time, effort and most importantly the process it takes to get there which causes us to make poor financial decisions with disastrous consequences. Are my wants being satisfied on a solid financial foundation and structure?
- There is a time for everything, and a season for every activity under the heavens. There comes a time that we may only be able to afford what we need, not want, for a time. That is not to say all hope is lost and not even bother. Certainly not. Rather it is good to concentrate on providing our needs now and while at the same time increasing our capacity to be able to be able to eventually get what we want. This process may take time but you will eventually get there. Is this the right time to be satisfying your wants?
- Without vision, without purpose, restraints are cast off. Without a bigger picture, a purpose in life, it will be easy for wants, without restraints, to take control over our finances at the most crucial points in our lives. Ever since I set goals for myself, it has been easier to control myself and make better financial decision because I have to think of how my current decision will affect my long term plan to reach my goals. I can better decide if and when it is okay for my needs to transcend to wants and if it is okay to indulge them. What’s the end game?