If you really want to take complete control of your spending, you must have a very clear understanding of the difference between needs and wants. I suspect you’ve heard this before, and perhaps you already understand the difference, at least on a technical level. But I’ll bet that if you could hear a perpetual recording of yourself, you would find yourself saying “I need fill-in-the-blank” — (something that isn’t a real need at all) — at least once a day.
Listen to the people around you, because you will hear them making this mistake all the time, too. Last week a friend told me she needed a bookcase. “No,” I told her, “You WANT a bookcase.” “NO!” she exclaimed. “I NEED a bookcase! My books are stacked up on the floor!”
So? It might be nice for you to have a bookcase, but your life will go on without one. And you, my friend, will be richer, because that bookcase money will stay in the bank.
If you are reading this, you have absolutely everything you need. You have enough food and water to keep you alive, clothing to keep you socially acceptable, and a safe haven from bitter cold and wolves. (In fact, you seem to have Internet access, too!)
Everything else — except maybe medical help and medicine — that you have spent a lifetime of earnings on was almost certainly optional.
I’m sure this sounds extreme, but think about it. There are people all over the planet who live with little more than what they need to survive.
Here in the USA, this sort of deprivation is unthinkable to most of us. But the truth is, we’ve become so used to having so much more than just what we truly need that we still have a rather blurry definition of what real “need” is.
Here’s another, maybe more relatable, example of needs versus wants. “Great Depression Cooking with Clara” is a popular YouTube cooking show and book created by Clara’s grandson, Christopher Cannucciari. In each episode, the now 90+-year-old Clara prepares recipes that her mother made during the Great Depression, sharing stories and wisdom as she shows you how to make simple, inexpensive, and delicious meals such as lentils and rice, pasta with peas, and chicken noodle soup.
In her YouTube episode of cooking peppers and eggs, she said: “I never use a cutting board – we didn’t have all the conveniences — a cutting board and stuff.”
Now here’s a rare woman without a clutter problem! And I’m willing to bet that whatever income Clara has coming in (which may be millions now that she’s an Internet sensation), she still regards a cutting board as a “luxury.” And I’ll bet that even before she became famous, she had a nice little nest egg built up in the bank. Clara wouldn’t buy anything without first asking herself, “Is this something I really need?”