Redefining "Want" and "Need"

As I wrote the last entry, a thought hit me like a freight train. If hubby & I can rid ourselves of a mountain load of debt, why can't anyone else? The short answer...they can! I've been a little down since recent conversations with folks who are starting on the debt-free path. Why are they so sure they can't do it? Doesn't that line of thought set one up for failure out of the shoot? The answer is two-fold. First as you realize just how much trouble you might be in, you feel overwhelmed...to the point of hopelessness and inaction. But you shouldn't let it stop you from achieving your goals.

Second as you try to revamp your financial situation, you may or may not realize that your lifestyle has to change. The degree to which a lifestyle has to change depends on the family. Some families have to make major changes like selling a home or car, taking on another job, etc. We were not in that position, so I can only empathize with how difficult that type of lifestyle change might be. Yeah, it seriously sucks that you have to sell your lovely home, but what's more important? A nice house filled with really nice things? Or ridding yourself of fear, anger, frustration and sadness because you cannot pay all your bills?

And therein lies the problem. Many people will say they want to be debt-free, but they don't want to do the work or make the hard sacrifices. It's like losing weight. I'd love to be 50 pounds lighter, and the only reason I'm not is because I haven't committed myself to the hard work involved. Why? Because I'm too comfortable and not looking forward to the sacrifices. I don't know many who relish the idea of going through great pain to achieve a goal, but I promise anyone this. If you trudge toward the goal one step at a time...making the hard choices, following through on the commitment, staying focused and encouraged when there is no good reason to...you will never regret it.

When one is faced with overwhelming debt, many sacrifices have to be made. One of the first things a person can do is redefine the words "want" and "need". Americans have gotten all too comfortable with saying, "I need ________." Most of the time, the blank represents something that truly is a want. So let's redefine those words.

Trixie's Dictionary:
Need = a product/service that is required for survival
Want = a product/service that is extra and only purchased after all needs are purchased and only if extra funds are available to purchase it

Sometimes those definitions aren't even sufficient. Some people think they need a 3,000 square foot home for their family of three. More affluent members of our society may see a country club membership as a need because it's required for survival within their social circle. That's not at all what I'm talking about by survival

Merriam-Webster defines survival as "the continuation of life or existence". That sums it up! Examples of a need in our society include things like housing, food, utilities, transportation, clothing. Be careful! Even in those categories you can overspend your limits...huge, expensive home, overpriced cars, top-of-the line groceries or lots of eating out, running the furnace or A/C at high levels. Did you know that in 1973, the average home size was about 1600 square feet, and in 2005 that jumped to about 2400 square feet? And overall our families are getting smaller. We're accumulating way to much crap (aka "wants") and need more storage space. Well, that and we like to impress. :)

I'd love to have a slightly bigger home, but our finances will dictate when that will happen...if ever. Our family goal is to have a mortgage that is less than 25% of our take home pay and to have at least $15K in the bank as an emergency fund. That goal brings only peace of mind if we purchase the best home we can afford. Will my next home be my dream home? Probably not. I can dream pretty big! As far as our car goes, we drive two paid off old vehicles. They are safe, and they run like dickens. Do we have to shell out money for repairs? Sure, but we've purchased vehicles based on reliability and need...not looks. We don't ever wish to have a car payment again. Honestly I don't know if that is realistic considering that our cars are getting pretty old...12 years and 8 years respectively. But I'm definitely going to drive the wheels off them and continue to save little bits for a new one. As far as buying other things on credit, we won't go there. If we can't afford it, we don't get it. Period. End of story. The only time I could imagine us ever begin in consumer debt again is to literally survive...furnace gives out, major health problem, etc...not because we want cool clothes, lots of dinners out or constant entertainment. And if we find ourselves in consumer debt again, rest assured we will work our butts off, do without and pay the loan off early. In terms of utilities, clothing and food, I work very hard to keep these expenses as low. We keep the thermostat low to avoid high utility bills. I shop weekly sale ads, clip coupons and plan weekly meals to keep the food bill lower. I also love to cook, so I like to try making convenience foods from scratch, which saves money...pre-packaged dinners, sweets, snacks, etc. As far as clothing, we don't buy much brand-new. Obviously with growing girls, we have to shop a lot for them. Some things I buy brand-new but only if it's an item that I know will get a lot of use like coats or shoes. (That part is even easier for us because we have two girls, so there's twice the wear time!) As for us, we wear the same clothes for years buying new items only when needed or when there is extra money. I love, love, love going to garage sales, clearance sales, consignment shops and charity stores. Retail is for suckers! If you turn your nose up at that sort of thing, I don't know what to tell you other than I've found some very, very cute things that show virtually no signs of wear. I'm not a fashionista, but I don't buy just anything!

If one can control spending on "needs", they stand a good chance at controlling spending on "wants". We've been blessed enough to afford some little "wants" even at this low point. For example, we still go out to eat, but it's usually some place cheap and not very often. We still intend to buy for Christmas, but it won't be lavish and lots of gifts. In fact, we've already got two used toy sets that are in very good condition that our girls will adore. If that's all they end up getting for Christmas, they will be very happy...trust me. Hubby & I still plan date nights, but they usually involve some inexpensive activity.

In our family, "wants" are at the bottom of the list. Our income is first spent on "needs" and then a specific amount of money gets tucked away for short-term savings (Christmas and other gifts, semi-annual insurance premiums, car maintenance, etc.). We also tuck away money for long-term savings (new car, emergency fund, etc.) Then if we have money left over, we can seriously consider a "want" purchase/service, or it gets tucked away for that purchase at a later date...like when we can afford to pay for it outright. Which means that, even when hubby was working, we don't spend a lot of money on "wants".

If you think, "Wow, your life sucks!", then I guess that's your problem. Even though we don't have everything we'd love to have, I love my life. The only time I feel bad about my life is if someone makes a snotty comment to that regard or if I compare our family with another who overspends (read: has a lot of neat crap). Would I love more stuff? Sure, but what's more important...sacrificing stuff for the sake of a stable family life or sacrificing a stable family life for stuff?

BUT because our expenses are low and because we have an emergency fund, we are not at each other's throats, we are not freaking out, we are not crying every night, we are not stressed...even though hubby isn't working. To me, THAT is the definition of financial peace!! If you think my life sucks, what about the person who goes to bed hungry or cold or under a bridge? If you think my life sucks, perhaps your finances aren't your only problem area.

If you have made a mess of your finances in the past, then you may be faced with an overwhelming, hard journey of cleaning it up. Let me be the first to encourage you in two areas. Make those hard choices that will propel you to the finish line, and don't let anything stop you from ultimately crossing that finish line. You will never regret it...ever!

Question: Do your words indicate that you want to make some kind of change in your life...financial or otherwise? And do your words support what you claim you want? If not, find out why.