One thing that is guaranteed is that everyone is getting older. If you aren’t serious about your finances, it’s time to get serious now. Retirement is right around the corner. If you need to have a “real” budget talk and prioritize your needs vs wants, there’s no better time than today!
If you are in debt, it is time to eliminate it. No debt? It’s time to increase your savings. If you are filthy rich and have no financial worries, stop reading…
One of the easiest ways to make budget decisions is to make a needs vs wants list. This will help you see where your money is going and find areas to cut your spending.
The list below does not address insurance and medical costs. I believe these are needs, but there are so many different options it would require a separate post.
Needs vs Wants
What is a need? A need is something you depend on for your survival.
Shelter- This does not mean you need a 6 bedroom 5 bath house. You need a place that is safe for you live. A dwelling with plumbing and electricity.
Food- Healthy food that will nourish your family and provide them with three meals a day plus snacks.
Clothing- Everyone needs shoes, and appropriate clothes. If you live up north you will need a winter coat and snow boots. These can be purchased at thrift stores, yard sales as well as acquired from family members and friends (hand-me-downs).
Transportation- A reliable vehicle that seats all members of your family and has working seat belts. If you live in an urban area, you might not need a vehicle, but need access to public transportation.
Utilities- Electricity, water, gas, and sewage are necessities.
A want is something people desire but they may or may not be able to obtain. Your survival does not depend on it.
Two Vehicles- I know many, many families who survive with only one car. Yes, it is nice and convenient to have two, but it is not a necessity. We have lived with one car and although those weren’t my favorite years we survived.
Large House with a bedroom for every child- I have lived in big houses and small houses, I would be lying to say that I didn’t prefer my big house with lots of extra room. But I didn’t prefer the extra cleaning and higher utility bills.
Brand new clothes- It might be easier to run to the mall and pick out the latest styles for your family, but it is more expensive. Even the best deals at the mall cannot compare to regular thrift store and yard sale prices.
Cable Television – Not a necessity. With so many options for streaming television, if you want to spend money on TV entertainment you can find a much better deal than cable.
Cell Phones- I actually know people who live without cell phones, and they are normal. If you must have a cell phone for emergencies, buy a prepaid phone.
Cell Phone accessories- I was shocked when I found out how much a cell phone plan with texting costs. Texting is not a necessity.
Extra Curricular Activities- Kid’s activities can cost a fortune. Not only are there expensive fees, but costumes/ uniforms, plus gas, and the money spent on convenience food because you are always on the go.
Vacations- Vacations are nice, but if you can’t afford them, don’t take them.
Memberships- Gym memberships are great, but if they are busting the budget take walks instead. You can also rent work-out videos from the library. This also includes book of the month clubs, and movie clubs.
Subscriptions- Magazines can be read at the library.
Expensive Haircuts – My mil has had her hair done at a high end place for years. After she moved she tried out a chain closer to her new home.
The budget place did an excellent job for a fraction of the price. You can even try cutting your family’s hair yourself.
We purchased a $30 pair of clippers 2 years ago and have saved hundreds of dollars on boys’ haircuts since then.
If you don’t feel confident giving your boys a haircut, how about a trim? Several years ago I would trim the back and around their ears in order to prolong trips to the barber.
Dining Out- Pack a lunch, make freezer meals, learn to cook, or eat spaghetti. Even in the midst of soccer 6 days a week we are surviving and eating without eating out.
Driving Thru- This would be the same as dining out, except you are eating in the car. This is a bad idea for many reasons. If you are constantly out during a meal time, keep a pack of water bottles and a box of granola bars in the car to tide everyone over until you get home.
These are just a few of the wants people spend money on. I am sure there are many more I am missing.
I remember when we decided to get out of debt I took a look at our spending from the month before. We had spent $400 on eating out, about $400 on little trips to Target and Walmart to get necessities, and about $1000 a month on groceries.
Now a little over a year later we spend $50 on dining out, $50 on Target trips and $600 on groceries. That is a savings of $1000 a month from just three areas of our life!
In less than a year we are debt free, have two paid for vehicles, a fully funded emergency fund, IRAs, paid cash for braces, and are saving almost half our income each month. If you are struggling financially, make a list of wants and needs and figure out how you can fix your finances.
If you think it is too much of a sacrifice to do without some of these things walk into a house built in the 1950’s. The bedrooms are small and the closets are nonexistent. Children shared rooms and kids had only a few outfits with a special one for church.
No one had even heard of a cell phone, and many families didn’t have a home phone. Eating out was something that happened on very special occasions. If you want to talk about sacrifice call up your grandparents and ask how their families survived the Great Depression.
I would love to hear from my readers regarding things they are living without. I think so many times we get caught up in the what world thinks we need, rather than really considering the costs. If you are living without something, share it in the comments.