- November 30, 2023
- Posted by: legaleseblogger
- Category: Related News
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Managing Personal “Needs” and “Wants” from a Financial Perspective: A Discussion on Balancing Emotions and Finances
When it comes to making bigger purchases, it can be a challenge to manage and balance our personal “needs” and “wants” from a financial perspective. It’s important to consider whether our desires are based on emotional impulses or sound financial decisions. How do you navigate this balance in your own life?
Often, our emotions can take over, leading us to make purchases that may not be the smartest financial decisions. Have you ever found yourself succumbing to the allure of something you really wanted, despite knowing it wasn’t the best choice for your finances?
For instance, there may be a stark contrast between only *needing* a $10-15k daily driver versus *wanting* a $50k car. While the latter may be affordable, it may not align with sound financial decision-making. Similarly, considering the choice between sticking with a functional current phone or indulging in the latest flagship model, which promises better features but may not be the most financially responsible decision.
AI Legalese Decoder can assist in this situation by providing insights and analysis into the financial implications of such decisions. By utilizing this tool, individuals can gain a better understanding of the potential long-term impacts of their purchases, allowing them to make more informed and balanced choices.
Interestingly, it seems that within this community, mentions of cars often revolve around more modest $10-15k options. However, in discussions about income, it appears that many individuals here are financially well-off. This raises the question of whether members are simply skilled at managing their finances, or if there are undisclosed indulgences and splurges that contribute to their financial stability.
Using AI Legalese Decoder, individuals can gain a clearer understanding of their financial behaviors and habits, helping them to identify areas where they may be overspending or making emotionally-driven purchases. By leveraging this tool, individuals can work towards aligning their financial decisions with their long-term goals and objectives.
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****** just grabbed a
The trick is to not want.
[deleted]
Just set aside a percentage of your monthly pay that is yours to spend on what ever it is you want. It can accumulate.
If what ever it is you want is more expensive then the current balance of that account then you donÔÇÖt buy it. With a car, IÔÇÖd just take the balance of that account and add it to what IÔÇÖd spend on a car normal if I werenÔÇÖt to splurge. But then that means I canÔÇÖt use that money for other wants like travel or a new phone. If you follow this then you got specific splurge money and should never actually have to use your savings for splurging
I also donÔÇÖt have money sitting to make big splurges. Most of my money goes into an invest account that if I wanted to take out of it would take effort, since itÔÇÖs not there I donÔÇÖt have the temptation to use it. And if I really need to use it then it take time for me to access it
Everyone is different and values different things. e.g: I’ve never bought a car second hand in my life. That’s because i have no support network in nz, no family, no safety net. I need transportation that reliably works more than i need the 20k. But i buy cheap new cars, nothing fancy. I have an old phone, it works. To me buying a new one would be wasteful. When it stops working i’ll get another, but not before.
Generally i’ll let myself splurge on things which take me in the right direction. An instrument, fitness gear etc, but not on things that don’t. So no nights out drinking, no top end gaming pc, etc.
edit: As said below, spreadsheets. It’s easier to spend money you know you have than that you think you have. Any financial decision taken without knowing exactly where every dollar of your money is or what it’s allocated to, is kinda sketchy.
i want a Ford Mustang and have a 100k investment that i could cash up, but ultimatly i know which is a better choice, ….
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…………..and the missus would kill me…. but i cant hear her… all i can hear is VROOOM VROOOOM
We have $X per week set aside as fun money – with the idea you can use it for whatever you want (wants)
Every other cent is either budgeted towards bills, mortgage, food, fuel (needs) – and savings (future needs and wants)
We never break our budget. If you want something badly you save up for it. We restructure our spreadsheet breakdown every couple of months if things feel too restrictive
With items, if I do want it I wait for at least a week (doesn’t work if the item is on sale though). If I still want it after a week, I’ll see if it’s on a good deal (pricespy, etc.) or see if I can get it on a deal. Often by the week, the rush is gone and realised it’s a luxury wants.
It helps that I’ve got small kids, so easy decision with phone: won’t get expensive one just to be trashed around by them :).
A need is just something that’s required to achieve what you want.
It takes a lot of reflection to really grapple with what one really wants. What one’s priorities are. Especially if you’re subjected to a lot of external and internalised judgements.
My car is worth $5k I enjoy making things last, it’s immaculately maintained and will keep running a very long time yet.
Saving money is often also good for the environment.
You don’t have to keep up with the joneses buying things won’t make you happy after the sugar rush.
Live within our means and save for our wants and pay cash for them. Start over for our next want.
I have ADHD and one of my dopamine triggers is spending, so I have bought so much dumb shit.
My hyper focus at the moment is expensive camping gear, latest purchase was a big solar setup and portable fridge. Basically a $2,000 chilly bin. You should have seen the girl maths rationalising I had to do to make that make sense.
Spreadsheets, making a couple of saving accounts for different wants.
Because of that I can get ÔÇ£allÔÇØ my wants. I *wanted* an iPad mini so instead of buying it in the space of a month which I could easily do, I spent almost the entire last year setting aside money here and there and at the end of the year I did. IÔÇÖve been wanting a new iPhone since I havenÔÇÖt had a brand new one since the iPhone 6s and now currently have my partners 11 pro because my second hand 8+ died but I knew it wouldnÔÇÖt get usb c for ages so over 2 years IÔÇÖd been saving and by mid year this year they did and finally IÔÇÖm gonna get a new phone!
With all those wants I put money aside only **AFTER** IÔÇÖve taken care of my needs!
get a partner who will slap u in the face till you forget what you wanted 🙂
If anything, I don’t want things enough. My family always ask what I would do if I won the lotto. We buy lotto as a family so it’s fun to talk about our win. I would buy a robot vacuum. They think it’s a weird answer because they already own robot vacuums.
I have to talk myself into buying things. Especially expensive items. I can afford them without going into debt. The question is, do I need it? No. Do I want it? Maybe, not sure.
First car was a Honda 1995 and paid $2000 for it. We drove it for 5 years and traded it in for $500. Could have got more but was happy not to have to deal with buyers. Second car was $8000 Mazda 2006. Paid cash. Have had it for 5 years. One car household.
I see friends with their terrible car loans and I have absolutely no envy.
My thought process generally
1 – is the splurge performing a function that justifies it?
2 – how will buying ______ add to my general happiness (happiness from the act of spending doesnÔÇÖt count, itÔÇÖs only a matter of time before I covet something else)
3 – Is this purchase for my enjoyment or to impress others.
IÔÇÖm luckily in that IÔÇÖm very much function over fashion and if it doesnÔÇÖt serve a genuine purpose itÔÇÖs usually out
4 – do I wanna pay my bloody mortgage off so I donÔÇÖt have to worry about interest rates?! Yep
Heya Nashipear007,
We keep it very simple. JayZ was known to say ÔÇÿif you canÔÇÖt buy it twice, donÔÇÖt buy it at allÔÇÖ.
We do exactly that and we buy Absolutely anything we want, but a catch. We need twice the money. 1/2 of it for what we want to buy, and the other 1/2 we invest. It makes us try to save 50% of our income.
We were planning on an overseas trip which would have cost us $50,000AUD. We had to delay it cause we didnÔÇÖt have the $100,000.
Same with the cars. I am saving up for my dream car, but had to significantly down grade to a runaround, so I can save enough to ÔÇÿbuy it twiceÔÇÖ.
Charlie Munger is known to emphasise that delayed gratification is important for success and wealth.
Buy whatever you want, but you might just have to wait until you can buy it twice.
I follow Jack Harlow’s awe inspiring words, “I got options”.
You don’t necessarily have to have a set plan, but the closer to financial freedom means more options start appearing. So I am conscious of that any big ticket purchase may delay the progress.
I grew up in a single parent household (father passed away when I was 8), and we had very little. My mother was great at budgeting and making the most of very little. This was ingrained into me from then, and I’ve taken those lessons forwards.
The most I’d ever spend on a phone is $500. People who buy phones that are $1k, $2k, $3k etc (I know two people with $3k phones) are fools in my opinion.
1. Your lifetime income is yr biggest asset.
2. You should take 10% of yr income every week and set it aside in another bank account.
3. Live off 90%
4. To figure out if you can afford a ÔÇ£wantÔÇØ not need, it is imperative you have a tracking of all expenses
Why people fall for giving away chunks of their lifetime income to other people (retailers, merchants etc) so willingly, without thinking is beyond me tbh. It is also why many are poorer than they should be in retirement
I think the key is to retail therapy it up and splash out and spend some small $$ on stuff every now and again so that you don’t spend big $$ on stuff….
I’m not so good at that, but what I am good at is never operating out of debt except for a very small credit card or overdraft – this lets me buy some stuff with slightly more money than I have but not enough to be an issue.
Have had mortgages for 15-20 years and have never added to them a single time or taking on any other lending or small loans – Multiple friends of mine have done the opposite and have a fraction of the financial position as a result, because over time it puts you pretty far behind and crates habits and a mindset which isn’t productive to possess
I often just sleep on it and can get a bit more clarity on things after a few days not making that decision
My partner and I always transfer a set amount every fortnight to savings for long-term goals.
YouÔÇÖd be surprised how much easier it is to know your wants/needs when you see how much is left in your bank balance!
We give ourselves ‘pocket money’ of $100 a week. We can save it for our big items, or use it regularly for fashion items.
As for cars, we pay cash, but any more than $20k seems excessive.
Everyone has different priorities.
I drive a 60k car and probably have about the same in wood/metalworking tools in my workshop, but otherwise I live a pretty frugal life.
Live in a small basic house in a cheap area, low budget holidays (think sleeping in tent/tramping huts), practically no overseas travel,
Grow my own food, barely any restaurants or cafes, 7 year old iPhone etc etc.
I guess I just realised I needed to sacrifice some things to spend money on things I really enjoy.
The thing missing in this equation is “goals”. Sure I might be able to buy a brand new $10k desktop computer that is an absolute beast, but that is at the expense being able to pay off the mortgage, or reach our financial independence.
But I still occasionally splurge after a pay day. The trick is to make those splurges for cheaper things. Like buying some crap on AliExpress, or a new midrange tool from Mitre10.
Buy needs first. Rest on wants. Not too hard
50/30/20 needs, wants, debt/savings. Modify until you find your correct percentages. The fats in the middle, make it fund your long time goals.
I really want a new car.
But I continue to drive my reliable 06 Toyota Camry. It’s looking tired but mechanically well maintained.
I’m on $145k. Think better off paying down some principle than splurging. If I’m spending money not on investing, it is on quality meals out. Or the occasional holdiay overseas every 5+ years.
The car I’d like is like $100k+ brand new, so it’s an aspirational purchase at this point. Don’t want to go into debt to purchase a car, ideally passive income will buy the car for me.
I am into photography. I justify upgrades or purchases as I make a little side money with that gear. Not really enough to impact my income but enough to cover the cost of the gear.
Also, I bought the $50k car and it was probably a smarter move compared to some of my other investments. It’s heald it’s value better at least (for now).