Do We Really Need What We Want?

This is a guest post by Heather Johnson.

The most valuable lesson I’ve been taught came from my dad –- from the day I was a little girl being bounced on his knee till today when I’m a career woman in my own right, dad has just one piece of advice when it comes to finance –- Just because you have the money, it doesn’t mean you should spend it. In this day and age of the credit card and blowing away money that you don’t even have in the first place, there are millions who would view dad and his wisdom as a throwback to the days of the dinosaur, but truth be told, it’s this valuable inheritance of mine that’s made me a sort of financial genius among my friends, most of whom are in various stages of debt.

Consumerism has dealt a severe blow to the habit of saving for a rainy day –- most of us live from paycheck to paycheck, and as if that were not enough, use credit cards indiscriminately to be swallowed up in the endless black hole of debt. We assume needs that do not exist, we fool ourselves into believing that we have to buy anything that catches our fancy, and we are not bashful about spending money that is borrowed at high interest rates and which we have no clue as to how we’re going to repay.

The only way to curb impulsive spending, the scourge of every person in debt, is to separate the chaff from the wheat, our needs from our wants. If you have trouble deciding the difference on your own, here are some questions that will help:

• Are you or members of your family going to go hungry if you do not buy that item on the grocery list?
• Is that piece of clothing you have your eyes on going to fight for space with so many others just like it in your closet?
• Do you want that big screen TV just because your friend/neighbor/colleague/brother-in-law bought one and you have to play “keep up or be left out”?
• Do you feel you have to graduate to the latest notebook computer simply because the technology is newer even though you’ve had your old one for hardly a year and it works fine?
• Do you feel that it’s time for a new cell phone simply because you’ve had your old one for some time now and you’d like a change?
• Do you feel naked or incomplete if you’re not carrying around your credit card at all times?
• Do you recommend taking out a new mortgage on your home just so you can finance a vacation to the Bahamas?
• Do you procrastinate on loan repayments so that you can spend a day at the spa?
• Do you believe in living for the moment and indulging yourself at any cost?
• Do you feel you ought to have that car that guzzles gas by the gallons even though you live just a few blocks away from work?

If you’ve answered in the affirmative for every question except the first, then you’re letting your wants get in the way of your needs and musts. There are things in life that are more important than just buying new things that you have absolutely no practical use for and which are added to your list of possessions at the immense cost of debt. The old adage of being able to live within your means takes on more meaning in this time of economic hardship when prices are skyrocketing and making even the most basic commodities expensive. There’s nothing to do but go with the flow, tighten your belt and ride out the rough times, a task made easy if you’ve been wise enough to put aside more than a few pennies for a rainy day.