Distinguishing Wants From Needs

Everyone has something that they want. To deny that is to deny being human. Understanding this, and being aware of the impact it has on us, helps us to reflect on our own behaviours and recognize financial management patterns. When we recognize patterns within ourselves, we have the power to control them.

If a want is strong enough, it can move over into the need category. Another acquaintance, CluelessGirl, once borrowed money from me for “something important”. She borrowed the same amount from several others. I agreed, as it sounded important, and the amount wasn’t a lot for me.

Next week, CluelessGirl gleefully whipped out the latest iPhone to show us. She had used our money to buy herself an iPhone! What the fuck!

Not only that, but I didn’t get that money back until several months later. Oh well, at least I got it back. Some may disagree and say that being connected on the go with a smartphone is a need these days. However, just like any ‘appliance’ item, if a cheaper version gets the job done, the latest and greatest smartphone falls within the ‘want’ category.

Here’s another lesson, while I’m on this subject: Never lend money that you aren’t ok with losing. If someone gets to the point (financially) where they’re approaching others for money, and it’s not for investment/business purposes, there’s a good chance you’re not going to get any of it back. Treat any money that you are lending them as a one-way donation, and you’ll avoid disappointment.

Perceived Needs

Needs can be heavily influenced by our psychology as well. Fear and anxiety can cause something to be seen as a need under abnormal circumstances.

During the early days of the COVID-19 pandemic, people started hoarding items that they considered essential and thought would be in short supply. Toilet paper became the star of this show, and people hoarded pallets of toilet paper in their homes out of fear that there wouldn’t be enough for everyone….only to find out later that there was no shortage of toilet paper, nor was it something that provided a significant benefit during such a crisis.

This is an extreme example, but plays out in our daily lives with other items too. Fear and anxiety aren’t easily overcome due to the way peoples’ brains are wired, but recognizing what triggers unfounded fears and anxieties within us can be a helpful way to tame them.

Don’t Worry About What You’ve Lost Or Don’t Have; Be Thankful For What You DO Have

One way that I’ve used to adjust my thought patterns around how I perceive needs and wants is to put things in perspective, and finding ways to gain a greater appreciation for what I already have.

When we find ourselves wanting to keep up with the Joneses, or just wanting more, perhaps it’s time to do a temperature check. Sometimes, we need to bring ourselves back to reality. I’ve found that it helps to create some context.

Much of the world population lives in far worse conditions than we do, in our first world nation. It’s easy to forget this because we don’t see it on a daily basis. Sometimes, I watch documentaries about life in other countries to help me remember that and “bring it home”. Most importantly, seeing that they can still be happy with their lives and simple joys helps me to reevaluate my own needs and wants.

Having good health is also something that we take for granted while we have it. Quality of life can deteriorate dramatically when someone is battling cancer or needs weekly blood transfusions. That’s just the tip of the iceberg, and remembering that is another way that I sober myself up.

Establishing Good Habits, Breaking Bad Ones

Often, we start forming habits from a young age and reinforce them over many years. It’s fine if they’re good habits, but what about bad ones? They’re not unwound overnight, so be prepared for a battle if you’re serious about making positive changes in your personal finances. I’ve read articles saying that it takes at least 21 days to break a habit, but I suspect that old habits take a lot longer to beat.

On our own, it can be very difficult to simply will ourselves to break a bad habit or establish a good one. Like dragging yourself to the gym or stopping yourself from spending money on daily Starbucks coffee, it helps to have a buddy who’s along for the same ride and watching your back. In addition, starting out small and working up to bigger things can be a more effective approach than trying to make an extreme change over a short period of time.

Whatever habits you choose to establish or break, you’ll have to consider the stage of life you’re at, and whether others will be impacted by these changes. Knowing your priorities will be important in this process.

At the end of the day, our perceptions and habits shape our mindset, and that mindset will determine where our financial journey takes us.

Visit Part 1 of this post, in case you missed it

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