To be the master of your finances, you need to effectively budget. And to effectively budget, you need to be able to differentiate a need from a want.
A need is something that you absolutely require, e.g. groceries, fuel, utilities, work clothing.
A want is something you simply desire, but don’t necessarily need, e.g. a top of the range LED television, a manicure for your pet dog or a miniature Louis Vuitton handbag for your three year old daughter. These are wants. They are not needs.
The trend today is for people to get into debt to buy such luxury items – wants.
The strong desire for these products can often confuse people, convincing them that the item is a need and not a want. And advertisers and marketers exist to convince us that our wants are in fact our needs. If you want to control your finances and achieve your financial goals, then you need to get real with yourself. You need to master the art of distinguishing your needs from your wants. When you do this, you will realize that you aren’t as poor as you may think.
At the end of the day, our needs are limited to just four things:
Shelter - a roof over your head to keep you safe from the elements.
Adequate food and water - to keep you healthy.
Adequate health care and hygiene products - to maintain your health.
Clothing - to ensure you are comfortable and dressed appropriately.
This is all we need at the end of the day, and anything that goes beyond it - the big house, the designer clothing, the premium foods, etc are wants.
It’s okay to treat yourself along the way, provided you have the funds to do so. What isn’t wise if you really want to master your finances, is to spend money like it’s going out of fashion. No, just because premium caviar is classified as ‘food’ doesn’t make it a ‘need’. Just because that $400 Ralph Lauren shirt is ‘clothing’ doesn’t make it a ‘need.’
Distinguish what your needs and your wants are, and you will be one step towards being the master of your finances. Ask yourself if it really is a need or a want, before your open your wallet! You’ll be amazed at just how much money you really can save, and you’ll see that you really aren’t as short of money that you may think you are!
Shared by Coach Amos
0923-1520501
Like: http://www.facebook.com/coach.amos
Follow: http://twitter.com/coach_amos
Visit: http://coach-amos.blogspot.com
Blog by John de Ridder, 0419-427-419, john@focusyourmoney.com.au, Canberra, Australia
No comments:
Post a Comment