Sometimes the hardest decisions can be made by getting back to the basics. I’ve already said my piece earlier about how personal finance really ISN’T that hard when it comes down to it, so we’ll just consider this a small little appendix to the back of that elegant masterpiece ;)
Wants vs. Needs: What’s the difference?
I’m going to cheat now and copy & paste something I found that really summed it up perfectly (I tried to write out my own version but it just came out all sorts of convoluted). So let’s hear it for the guys over at SmartAboutMoney.org for saving me this morning:
Wants are nice to have but are not essentials: eating out, going to movies, text messaging, or getting the newest cell phone and ring tones.
Needs are the essentials, the basics of life that you must have to survive: food, housing, clothing. Some expenses that relate to your job (that is, your ability to pay for the basics) also are needs, such as transportation to and from work, and health care coverage to keep you well enough to go to work.
Excellente! Couldn’t have said it better myself ;) These guys also have this kick ass Wants vs. Needs Worksheet that’s perfect for printing out and plopping on your wall or refrigerator if you need a constant reminder of where you’d like your money to go. There’s nothing wrong with spending it on Wants, as long as you have enough to cover all the Needs. AND that it fits within your budget and you’re not just slapping it on a credit card so you get the best of both worlds! (Wants & Needs, that is. Not your plasma and your new debt)
Your wants will be different than my wants, and my needs will be different than Britney Spears’ needs. So like everything else with finance, just pay attention to your own needs and leave Britney’s to me. I mean her. Just for the hell of it, I decided to list out all my current Wants & Needs right now to show you a quick example (I used that same worksheet I mentioned above):
Luckily, most things on my Want List either costs thousands & thousands of dollars, or they require me to put in some serious effort – thus allowing me to concentrate on the Needs portion instead ;) I still might pick up the lottery tickets or the desk in the near future (esp if Target sucks me in again like it always does!), but at least I’ll be making the conscious decision to do so. I know what I WANT, and I know what we NEED.
And right now, I NEED to post this before the boss walks in. So pass this worksheet along if you know of anyone who could use it. It may look a bit childish due to its simplicity, but it helps remind you what you’re working/saving/living for. After all, a person without wants & needs is a person who’s just plain lost. Stew on that for a minute or two…
Bonus tip: Find a good "balance transfer" offer to help pay off debt faster!
If you’ve been making payment after payment (on time) and still haven't been able to get your debt under control, snatching up a good balance transfer credit card offer may be the ticket to try. That’s where in order to gain your business - credit card companies will let you transfer your existing debt to a new card and let you pay ZERO PERCENT interest on it. Saving you tons every month!
What's the catch? Usually balance transfer cards charge a fee (around 3% of your debt balance) to let you transfer your balance to their 0% interest offer. But we've found a great credit card that will let you do a balance transfer absolutely free. Click here to learn more and see if you qualify!
PS: If you don't trust yourself with another credit card, ignore this! This strategy is to help you get out of debt quicker, not risk adding more to it.