One of the key steps to reach a savings goal and thus Financial Freedom by extension, is to spend less than you earn. Let’s see how wants and screw your savings.
Often it is said that you should be spending money on needs only, not wants. What does that mean? To me, it means I should spend money on things that I need to be happy. I should not spend money on things because they are cool or the Joneses have them.
What makes me happy?
Good question. Experiences make me happy, spending time with family and friends make me happy and travel. That means there are a lot of goods out there where I should not be spending my money. Recently, I came across a few occasions where the need vs. want reflex kicked in.
Since the new job, I commute again with the bike and train. Living in Belgium means that we have 10 pct change of rain on any given day. I thus need to take with me
some rain clothes while biking. And I brown bag, so those sandwiches needs a place as well. A back pack is not that comfortable and makes you sweat too much. I thus attach a bag to my bike. A colleague started talking about a cool Ortlib bag he has seen. And indeed, they are cool and for hipsters. I want one! Then I thought by myself: hey, what is wrong with yours… And I now am in peace with not getting a new one.
The smart devices we have at home are not the most recent ones. They get slow, I run often into storage limits when I want to update apps. Nothing impossible. Recently, I also found out that my Nexus 5 will not get the upgrade to Nougat. That was a bummer. The reason I bought it was my idea of eternal OS updates on that phone. Now, a hardware issue seems to be a problem. So, you start to look online for new devices. And then you realise that you want it, you do not need it. As long as the devices work, are secure and all my core apps work, I do not need a new one.
On the other hand, we recently booked a 4K ski trip for the holiday. That is a large sum of money and it is ok. It is part of the things in life that are important to me, that matter. For the summer, I would like to do a small road trip, even when it means flying to somewhere and renting a camper. I consider that money well spend. I love to travel and I want to pass the joy to my kids. Yes, we could also travel locally in Belgium. There is just too much change that the weather will be bad. And we can also do that on weekend trips.
How are the needs at your side?