Is Separating Wants from Needs a Key to Financial Freedom?

[Retired To Win]

Some people spend a lot of time and money chasing what they are told are the trophies of success: big house, luxury car, big TVs. It takes a special kind of perspective to categorize those as needs, and I applaud RTW's pursuit in that area. However, some people do find enjoyment in those wants.

So it is really a case of "to each his or her own."

I have never thought I had a "special" kind of perspective. I guess in this consumer culture I have a minority perspective. As you say, to each his or her own, but I have to add/emphasize: to each his or her own but I hope as heck they are clearly aware of what their perspective is costing them and what other options they are failing to recognize as possibilities.

[JoeP]

Also consider: following other pursuits is either deferred, reduced, or simply not even known because of commitment to a job. We're so focused on the circular system of working to earn money to spend money to keep working to get more money to spend, that options outside this pattern may seem foreign.

RTW makes good points, and for some they solicit involuntary rejection because most go against what's been drilled into our brains. Much of it makes sense only after abandoning one's familiar system of "rightness" and opening the mind to options that seem wrong at first.

[disneysteve]

I have never thought I had a "special" kind of perspective. I guess in this consumer culture I have a minority perspective.

Exactly! So do most of those of us who hang out here. We are not the "normal" American consumers.

[juvy]

Yes. If having problems financially, buy only what you need. And if there's an extra then you can have what you want.

[krantcents]

My parents who were wealthy brought me up as though we were poor.They lived through the Great Depression and did well. Their wealth never showed, but we lived very comfortably. They emphasized that I would get what I needed vs. what I wanted. Eventually, I had to save to buy my wants! They emphasized a good/excellent education which started me off very well. I did not have a car in high school, but received one upon college graduation. My parent's influence was seen in everything I did. I worked hard/smart and achieved financial independence at 38 years old. I passed on these values to my children and they are successful adults. Bottom line, it works!

[Retired To Win]

... As Steve pointed out, there are a lot of folks that come to this forum and make posts about their $40,000 car, their $30,000 wedding, their $5000 engagement ring, and their $8000 vacation. In their minds, these things are all non negotiable "needs." Definitely a dangerous mindset to have.

If your goal is early retirement -- or come to think of it, retirement at any age -- that mindset is not just dangerous, it can be fatal. In my case, at my on-the-job income level, a $40,000 car "need" would have added untold years to the length of time I would have had to stay on the job in order to accumulate the extra capital required to support such a "need."

Even if you are not even thinking about retirement, something like that $30,000 wedding (or a few of the $10,000 vacations referred to by DisneySteve) would put the kabash on any realistic expectation of buying a home. At least, that would have been the case for me.

The saddest part is that people think such extravagances are adding value to their lives... when in fact they are detracting value from it.

[Retired To Win]

There are too many things I want right now, but I am also shooting for financial freedom...

So, the questions I would ask myself in your place would be:

(1) How much longer will I have to wait for financial freedom if I hardwire into my budget the cost of buying/doing this "thing" I want?

(2) What do I actually want more: that "thing" or the extra time living in financial freedom that I will have by not hardwiring the spending of that money into my budget?

(And remember: our life time is a finite resource. We don't get to tack on extra time at the end to make up for... getting that "thing"!)

[Retired To Win]

My parents who were wealthy brought me up as though we were poor...

Part of the problem today may be too many cash-strapped, hand-to-mouth parents bringing up their kids (on overextended credit) as if they were wealthy. Hardwiring an entitlement mentality into a young mind is not a very smart move!

[Retired To Win]

i have a friend that is retired, he'd been doing great with rental properties that produce over 9K a month but bought a large $750K house to live in. ths is a guy that likes to keep up with his mucky muck friends who all have big boats, nice rv's and big homes, now he's under a lot of stress due to a 5K/month mortgage, his retirement may actually be in jeopardy, bit off a little too big a chunk.

That is an absolutely perfect example of what I mean about separating wants from needs and knowing the difference. And NOT hardwiring the cost of your wants into your basic living expenses budget, thereby morphing the want into a chain-around-your-ankle need.

That is exactly what your friend did with that house. He could have satisfied his wanting "to keep up with his mucky-muck friends" in a lot of ways that did not require a recurring, long-term financial committment. But, ooohhh no. He had to strap that $5000 a month mortgage around his leg.

Damn shame.