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.
Super Healthy Kids says
I’ve carried a pre-paid cell phone for about 5 years. I’ve never had a contract and I literally get by with spending $50 every 6-9 months. I LOVE it. I always have it in case my kids call me from school sick or something, or I get stranded. It’s fabulous!
Wonderful advice! I’ve been pondering these matters a lot since I am in an empty nest. The 4 BR home, the cable TV … lots of serious assessing to do. Thank you!
I love it! I could not agree with you more. It is amazing what you can accomplish in such a short time – way to go! We just downgraded our cable and I am liking that so much better. We are tossing the idea around about going down to one vehicle. We have two paid for vehicles, but they are getting up there in mileage (both over 130,000 miles). Also, I think it would help me run around less and stay home more. So we are thinking of selling the two we have and getting a used mini van. We live in a 1970’s ranch house with a one car garage. People actually used to get by on having just one car so I am sure we can do it. Sometimes it is fun to see how creative you can be to get out of debt. Thank you for the post.
That’s the nicest thing you’ve ever said about us…thank you!
I’m a avid (to put it mildly) reader – I used to subscribe to lots of magazines and I used to buy a few books every month. Not any more. I read magazines at the library (or I ask for subs for Christmas) and I get my books from there, too. The only books I buy are things like travel guidebooks and SAT prep books – things that need to be current – and homeschool books. I have found some great used books at our local Goodwill, including a 50-cent Spanish dictionary and an SAT prep book with a great vocab list. (And The Penderwicks, which my children totally loved – we now have the sequel from the library…)
If your community has a Freecycle program, that can be a great way to get some things you need and give your unwanted items a new home. Also, if you’re part of an online or church community, ask if people know where you can get an inexpensive (fill in item name). This is how we got our free piano – from a church friend – and I had someone else offer me another free piano a couple of years later! I’ve also been offered an accordion, good deals on used cars, etc. We are picking up a free TV Saturday – a friend is too lazy to sell it. Asking people for shopping advice gets the word out, and someone may have just what you need.
thank you for this awesome post! I have been talking to some of the girls that I went to school with about this topic. They don’t understand how I can have 3 kids…. one on the way and still stay at home. I try to explain everything that you said to them but they still don’t get it 🙁 But thank you for this reminder 🙂
Oh, I forgot. Two other ideas:
We don’t use paper plates. I bought some dishwasher-safe plastic plates at Wal-Mart and we use those for most meals. This saves money and trees.
Set your thermostat one degree warmer (summer) and colder (winter) every year until you figure out what you really can’t stand. We saved $20-$30 per month this summer by changing our thermostat from 79 to 80 degrees. (This is our breaking point – 81 is pretty awful when it’s humid.) We have lived overseas without A/C in a hot country, so we know we can survive without 72-degree climate control. On really humid days I drop the temp to 79.
Great post! Especially with the economy the way it is now. I have been working very hard at paying down my debt. I know I can do better and your post is motivating me to do better with my wants vs nees. Thanks again!
You are a great motivator. Thank you.
Wonderful post! We are adjusting and finding new ways to be frugal. I wished I would have done this before we allowed ourselves to get into debt! Keeping up with the Jones is stupid….and we were the silly ones trying! Lesson learned! Dave Ramsey has rocked our world and we are striving to become debt free. Thanks for your post!
We will be giving up our 3 cell phones – home, dh’s, and mine for pay per minute when our plan is up next year.
We have only 1 extracurricular activity – piano for the kids.
WE don’t eat out much at all and cook homemade.
We use cloth napkins to eat with. Cloth rags to clean with and make our own cleaners.
I just gave up Netflix and now we are getting dvds from the library. 😀
The magazines we have coming were either free or gifts.
I find most of our clothes at the local DAV and have gotten a lot of free things off of FreeCycle.
Great post. Wonderful. I dealt a great deal with this when I was a credit counsellor. I have saved this to make reference on my blog.
Somebody's Mimi says
At the present I don’t have a maid. BUT I’m looking for one! Seriously, you do make sense. If only I could grasp your excitment. We are debt free but our problem is we have way too much stuff… cars, boats, bedrooms, toys, STUFF!! BUT it is all paid for.
We do without cable. I have only a cell phone that you buy the minutes ahead of time. I hate it, but I really don’t use it much and just don’t need anything more. I used to have a nicer phone and a contract, but I still didn’t use it much. What was the point of paying all that money? We don’t have new cars. We don’t eat out often, not even once a month.
We also don’t have debt other than the mortgage.
I cancelled my Netflix and my satellite TV. I only get those free magazines. I’m trying not to use the air conditioner anymore this year. And wait as long as I can to turn on the heat.
Most of my little ones clothes are hand-me-downs. Which saves a lot of money since he grows so fast.
We hope to get financial peace!
Great Article. i just did a post on my blog semi-relevant to this, basically about kids today and hat they feel they “need” and teir sense of entitlement and how it USED to be. So it was great to read this article. It is amazing how much we can cut down. SImpler life debt free!
Check it out here
I love my small house 🙂 6 people: three bedrooms, 2 and a half baths 🙂 But we survive. Every time I try to get my dh to do this (make a needs vs wants list), he refuses.
Thanks! I so needed this reminder today! This summer we got out of debt, besides our mortgage. We did this by only providing for our needs, not wants.
Now that things aren’t so tight, I find I’m slipping back into my old ways. We’ll have to re-evaluate our family’s wants vs. needs.
Danielle Hull says
We have a great working budget, but I have been convicted lately to whittle down the “extras” to focus on more important things, like the last few years of house payments. We receive and gladly accept hand-me-down clothing, but we also buy a lot brand new. This is within our budget, but I’ve realized that I do need to do more thrift store shopping. My mom is great at it, so I just need to give her money to do it for me!
How do we get our families to realize we all need to cut back? Why buy toys for cousins that will be in a garage sale in two years? How many toys does a child under 2 really need or even care about? We’re really working on de-cluttering around here. Our garage sale money is going into savings for our vacation fund.
We are blessed that my husband walks or rides his bike to work (actually, he was blessed with a new bike from a friend last year), so we’ve never seen the need for a cell phone. We’ve never had cable or satellite.
Our big splurge is the internet 😉 Thanks for the help re-evaluating! Danielle
We do pretty much the same thing. Cell phone has prepaid mins. for emergancies. Dish was canceled years ago. Both are vehicles are paid for. We have a surbaran we is a gas hog but I can’t see buying a smaller vehicle to save on gas. I have no payments, so this doesn’t make sense to me.
We have one credit card to pay off which I am hoping will be paid for by the end of this month. I want to work on our emergancy fund. Other then our mortgage & a home equity loan we are sitting pretty good.
Good list. I’m printing this out and showing it to my husband.
You go tell it, sister! More people need to learn how to start living responsibly, and stop being so self centered (I want it now! I will put it on the card!)
Thanks for the reminder and the encouragement!
Very good advice.
Amy Walton says
I was all set to buy a flat screen TV until I saw your news bit where they mention your 20-year-old TV. I watch maybe 1 hour of TV per week and one movie a week (if I’m lucky). I do not need a new TV. I’ll replace when it dies. Regarding cell phones, I’d go without one if it wasn’t for having sons who need to get in touch with me. I don’t understand people who are glued to their cell phones. the current young generation’s reliance on them is saddening.
Great post. We definitely need to eat out less! I know we could save so much money.
I shredded my Target card a year ago and hands down it was the best thing I did for our budget. I was spending at least $600 a month there!!! Now I spend about $100 between Target and Wal Mart. I keep trying to lower that amount, too.
We do many of the same things here – funny thing is, many of them are labeled “sacrifices” but to me they just seem to be sensible – and not really too hard to do.
The cell phone one cracked me up – I am one who has lived without one – I know, call me crazy – a 30-something mom without a cell phone! My husband recently got me one with pre-paid minutes – but I have yet to use it 🙂
I would like to post an American-living-overses-and-trying-to-economize item on my blog. It’s a bit different being thrifty in another country. What do you think?
I enjoyed your post and agree with all of it. We are a family of 6, two used paid for cars. We get by on a $450/month food budget. We have no cell phones, but have basic cable. I love to find bargains. We use freecycle and love hand me downs. We rarely go out to eat. To some these things may be sacrifices, to us it is just how we live, we don’t feel like we are missing out on anything. We are working on paying off student loans and then will attack the mortgage. We are avid library users for movies, books, and music. I love to find a bargain, stock up the pantry on sale/clearance items, and save money. Thanks for all your great ideas and keep them coming!!
We are similar to many here in the way we live/shop…finding bargains, budgeting grocery shopping, prepay cell phones, limit eating out, no gym membership (we walk and rollerblade and do home dvd exercising), etc.
I feel like we are always defending our frugal ways to friends who not only make more money than we do, but who also live month to month on a strict budget. We pay ourselves first and live on the rest. We are blessed that my husband makes decent money, but we still make FAR less than some friends who make over six figures, yet manage to spend more than they make every month! It’s crazy. We have family in Australia that we travel every year to see, so we often just use that as our fall back excuse of why we are frugal and need to save money. Truth is, we would still be more frugal than most anyway. We are on a quest for financial freedom and no flat screen tv, gym membership (when we have a very walkable neighborhood), fancy iphone, or new car is going to feel better than that!
We cut back on cable and internet to the tune of about $60 a month. We don’t get some channels anymore but honestly I don’t miss it. And I don’t even notice the lower internet speed.
Dinners out too. A lot of it is because of the new little one showing up, but we were goign out 2 times a week. That is just silly, and not too great for the stomach.
Great post! We have one vehicle (which we paid cash for), we live in a small home, we rarely eat out, and we have a budget that we are careful to stick with. Doing these things allows me to stay home with our kids, and I wouldn’t want it any other way.
We pay $20 every three months for two cell phones. We don’t use them for fun, just emergencies or “Where are you?” type things.
We used dialup internet until recently when we got highspeed because of our son’s college homework. We gave up the newspaper and some other things to pay for it.
We went with only basic cable until my mom moved in and offered to pay for it as she wanted it.
We live without vacations until we can save up for one (it takes about four years). We usually eat out once a week (after church) and spend under $20 for the four of us. We’re currently trying to eat out less.
We won’t replace anything until it’s broken, we don’t do upgrades (like t.v., fridges, cars etc.). We maintain them but don’t upgrade them if they’re still working.
If there is something we want to buy (like a dvd) we’ll look on ebay or wait for a sale. We don’t buy lots of clothes, we don’t eat out at expensive places, we don’t buy the latest expensive electronic “toy.”
We do without some things so that we can have other things (like a vacation every few years).
Hi there. We live in a big house where taxes, utilities etc. are expensive. Unfortunatly with the market in our area, we can’t sell. We’re working to cut in other areas.
We have two vehicles however since my husband and I both go to separate churches, if I don’t have my van – we don’t go to church. We could go down to one vehicle if it weren’t for that.
Thanks for this post. I’ll be re-reading it and seeing what other areas we can cut back in to try and save more!
We haven’t had a cell phone since 2005 and people think we are nuts! We plan on getting a prepaid one soon for emergencies. We only have one car and thankfully, it is paid for. We don’t eat out, don’t give fancy parties for our two young children. I do my own hair, pedicures and facials (until 8 years ago, I spent thousands of dollars per year on such treatments). We only have one credit card with a balance (it will be paid off in a couple of months). We are getting ready to buy our first home…2 years ago I wanted the mc mansion, now I am so excited to find something under 2000 sq.ft. for our family of four!
The Mommys Place says
Our family finally was able to get a pay for the minutes you use phone, bye bye to contracts. We have cut down on Netflix and only watch movies on TV, plenty of programs to watch for free.
We have reduced our expenses and are continuing to tweak it and working our way to financial peace.
I really enjoyed this post.
I’ve posted on my blog about economizing overseas. http://www.building68.blogspot.com
Crafty Mama says
Great post! I know Catholic Charities gives away clothing, so that’s another place to get it. 🙂
Thanks so much for your blog. About 1.5 years ago – I gave up the most expensive thing in our lives: my (now ex) husband.
I had been a stay at home mom, working at his office when needed, and going to school full time. This was my way of life for the better part of 10 years.
Once he left & the divorce proceedings began – I honestly was in for a shock. My ex made roughly 75k yearly, and we were always in the red. (I had no knowledge or control of his monies).
NOW I am managing the same home, same two great kiddos, my very first car (used), and the same pets. Not only do we get by just fine, but I have found that I do not financially NEED an entire weeks worth of pay. Oh, and I’m making under $10/hr.
Within the next year, my car will be completely paid in full – on a 5 year loan, all construction on the house will be complete, and the house will be ready to put on the market. There are times that I am astounded at what I’ve accomplished since he has been gone.
(just fyi – he ate out at drive thrus, etc 3+ times a day. When we divorced, his nearly $900+ fast-food budget was heavily discussed in court, as he balked at the amount of child support that was ordered)
At any rate – WOW. Thanks for such an awesome read. Oh – and trying your beef stroganoff recipe tonight. Thank you, Google, for leading me to such a wonderful resource when I searched “beef stroganoff without mushrooms”!