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Everyone's situation is different growing up. Whether you were born poor or rich, we all have our needs and wants. Understanding what you need and want in life can set you up for financial success.
I remember growing up; my parents were a bit strict with money. We only buy things we need and rarely spend money on our wants. My parents used to be poor, so they only purchased necessary items. When you are in a situation like that, you don't want to stack a lot of debt. It was wise to start building great money habits from the beginning.
When our family started to make more money, and our lives got better, we began spending on what we wanted. However, we still live frugally and watch our spending because we have gotten used to living frugally over the years. Due to my parents' teaching, I had to be smart with my money when I started to work and save. Of course, I sometimes splurge on things that make me happy. However, I watch my spending limit.
If you follow the 50/30/20 rule, you can balance the two. However, most people have a difficult time balancing their needs and wants.
The Power of $20 a Day
This is tea and no shade! Instead of going to Target and spending $20 on something you don't need, you can put that $20 somewhere else. If you save $20 a day at the beginning of the year, you'll have $7,300 at the end of the year. It is such a simple task, yet it makes a big difference.
In this post, I want you to understand that learning about your needs and wants can help you save more money. Most of the time, people spend money logically or emotionally. When you make a purchase, you either think about it, or your feelings get in the way to make a purchase.
What are Your Needs and Wants?
To achieve financial goals and attain independence, you need to understand your needs and wants because both are part of the economy. Needs are things people must have to survive: food, shelter, clothing, medicine, and transportation. Wants are the other things you might think you need but don't, such as entertainment, electronics, leisure travel, etc. The list is endless when it comes to our wants.
In today's society, most people constantly want things and are addicted to new things like phones, laptops, clothes, handbags, etc., and think that is the road to happiness. Our wants always override our needs, and it's challenging to balance the two. The feeling of wanting something can be hard to resist. So how can you stop buying things you want and appreciate your needs.
Here are powerful ways to avoid overspending your money.
Unsubscribe to Emails
How many emails do you get in a day? Probably over 100 emails, I'm guessing. Many brands and companies will be sending thousands of emails in a day so that they can sell you something. Companies want to make money by sending you deals or promotions on products or services.
Sound very tempting, don't you think. If you unsubscribe, you will save yourself from overspending and your wallet. Your email will also be more organized than before since you don't have to look at those useless emails anymore.
Setting a Fun Limit
Everyone's daily and monthly budget is different. If you set a limit for yourself, it can motivate you to stop spending. You can set your weekly spending to $100 or $200. The remaining money can go into your savings or investment, which you shouldn't touch. If you have a limit, you won't keep spending, and you won't take that money out from your saving either.
Find Something to Fulfill Yourself
To take your mind off of spending money, you need to find a hobby or side hustle to keep you busy. There are so many things you can do these days thanks to technology. You can start selling on Etsy, become an influencer, invest in crypto or stocks, start a business, etc. The list is endless. You just need to find what you want to try or what you are passionate about. You never know what can happen in the future unless you try.
By keeping your mind busy with other things, you won't have time to spend money on your wants.
You'll be surprised to check your closet and see how many clothes and shoes you own. You'll realize how much stuff you own by looking around your house. This is why once in a while, you should take the time to look around the house to declutter some things or take notes not to buy the same item. If you take inventory, you'll know what you have and what you don't need. You'll save more and worry less. It's all about balancing your needs and wants.
Understanding your WHY
When it comes to your needs and wants, questions usually help you make decisions. I don't know about you, but I always have to ask myself questions before purchasing. Why are you buying it? How often will it be used? Is it worth it? The list of questions goes on and on.
I know many people have a shopping addiction, and it's hard to stop buying crap you don't need. I used to buy things that I liked and wanted, but I saw how pointless some things were after the pandemic. By understanding the reason behind your purchase, you know what is worth and what is not.
Find Motivation to Stop Overspending
If you want to save or put your money to good use, you need something or someone to hold you accountable.
If you have a party, vacation, house remodeling, friend's birthday, or concert that is coming up, you need to start saving for it. By thinking of these things, it helps you to make smarter decisions with your money. It often prevents you from swiping your card when you have a big event or purchase, and you know when to say no to things.
Have you ever thought about becoming a minimalist? Minimalism has different meanings for everyone. It could be spending less or doing more with less.
It can feel very fulfilling when you own fewer possessions because you don't have to worry about cleaning or losing things. The less stuff you have, the more money you have for other things that might be important in your life, like traveling, experiences, or health. It is essential to understand what your values are in life. Is it having a lot of possessions? Is it living your life to the fullest by experiencing?
Borrow From Friends or Family
We all have friends or families with one particular item we want to borrow in their house, right? It could be a ping pong table, cooking appliances, outfits, etc. Instead of buying something that you might use once, you could borrow.
Let's say you have an upcoming party and you need some cooking appliances. Are you going to spend $500 on cooking appliances that you will only use once? If your friends or family have one, why not borrow? Once the party is over, you can return. Simple and easy, right?
We are all guilty of not turning off our notifications on our phones. Most people have many shopping apps on their phones that notify them when there is a sale or deal. Do you leave these notifications on so that you can shop more? Many people think they are saving more by buying things on sale, but it makes them spend more.
If you saw a $20 dress on sale for $10, of course, you would want to buy it because you are saving $10. Even worst, if the dress comes in different colors, it'll tempt you to buy all the colors. You'll end up spending more than you intended to. This is why disabling your notification on your favorite shopping apps can minimize your spending.
Rent Instead of Buy
If your friends or family don't have something you need, you can always rent. If you need to borrow tools to fix something in your house, Home Depot and Lowes lets you borrow their tools. You could also go to the library to borrow books or other media instead of buying them.
If you have an event or special occasion coming up but have nothing to wear, I got you covered! You could rent clothes at Rent The Runway. If you are planning on wearing an outfit once, you might want to consider renting it. You can save money and space in your home if you rent an outfit.
Stay out of Stores
You tend to buy more things when you see something that catches your eye. If you stay out of stores, you won't spend your money. Better yet, you will have a good credit score since you're not swiping that card. So unless you need something, you should try your best to avoid going into stores. I know how tempting it can be when you are in a store. You'll start losing control to the point where you start picking up things and looking at them. The feeling of wanting something will be difficult to resist.
Key Things to Consider When Shopping
Shopping for things is inevitable, and sometime you can't rent or borrow from other people. If you want to shop and save, you should keep these things in mind.
Why buy things at full price when you can wait for a sale? Take advantage of stores when there is a sale. You can save some extra bucks by shopping for things on sale. If you can't find it in the store, you can always shop online.
If things are too expensive for you, you can go to your local thrift store to buy things at a lower price. There are many thrift stores all over the country. Thrift stores can be a hit or miss for pre-owned items. However, you can always find some great deals.
Apps, Rebates, and Coupons
There are many resources like money apps or coupons to help you save money, so use them. You can get cashback for grocery shopping or just by shopping online by using Ibotta, Honey, or Rakuten. Who doesn't like cashback, right?
If you have coupons laying around your house, you should put them in your wallet.
Balancing your needs and wants can be challenging when all you want to do is buy things you want. By using the methods above, you can minimize your spending and balance the two. You don't need to buy a lot of crap. Improving your finance is a long process. Just remember to stay committed and intentional with your money. You got this!
Thanks for reading, and I'll see you in the next post!
She started her blog, The Money Dreamer, when she realized the 9-5 job was not the lifestyle she wanted anymore. After designing for a while, she wanted a more meaningful life, which was freedom, so she decided to venture out. She took action so that she can live her dream life and decided to help people to live theirs by helping them how to save, budget, and invest.