[Budget Plan: Part 3] Wants vs. Needs

We've set our goals and tracked our income and spending. The next step is identifying our wants from needs. It happens often, where we'd save money, think we're doing a great job budgeting then *BAM* one splurge and we're off track again. 

Know what triggers the urge to splurge! One major factor is stress--a stressful work/home environment or maybe the stress of a changing financial situation. According to nomoredebts.org, "[i]mpulse spending habits are often linked to stress levels". Know your personal spending triggers and be able to identify them before you give in. Being aware of these impulse buying triggers help you control them.

 

It happens to all of us. It's okay to give in and treat ourselves to something we want and not necessarily need, however  impulse spending can hurt us financially, especially when we're just barely trying to get on our feet and start being financially responsible. The key is planning your spendings and being able to tell apart your needs and wants. 

This part involves prioritizing and evaluating your finances and your lifestyle. This includes food, a home, utilities--you get the idea. It's the things you cannot live without. However, within those needs, we still need to evaluate our needs and wants. For example, we obviously all need a place to live. Where we choose to live, however is a choice we have to carefully make. An apartment, a condo, a house? How many bedrooms? How much space do we need to live comfortably? Do we buy the big 5 bedroom house, 5 and a half bathroom home or a two bedroom with one bathroom starter home that meets our needs? There's no right or wrong choice. There's only a responsible choice and it's all relative to our chosen lifestyles. Just take your goals and priorities into consideration. Review them as you decide on your wants and needs.

How I Stay on Track

   

I review my list of financial and life goals and read it over. Before splurging on a big buy I ask myself the following questions:

• Do I need this? Or do I want it?
• Does this help me reach any of my  life/career/financial goals? If not, why am I getting it? And is it worth possibly delaying reaching my goals?
• Is there a cheaper alternative? If so, why am I choosing this over the alternative?  

For instance, I was debating getting Photoshop a while ago. My thought process was: Yes, I need it and yes it coincides with my creative endeavors and which, yes, I might later on pursue into a career. There is, however, the unpopular alternative--GIMP. After a few months debating it, I decided to really stick with GIMP. Do I still want Photoshop? Yes, definitely. However, I realize that I had to make this compromise because I have other goals that had to be prioritized (like saving for the first home's down payment, saving for an emergency fund, etc). 

If you do give in to an unplanned splurge, just take note of what triggered it and see if it could be avoided. Or maybe even try to motivate yourself with a bigger reward if you don't buy anything unplanned. I usually have a wishlist on one of the sticky notes on my desktop, with my biggest and most coveted buy(s). Then, I set a time frame (i.e. if I stick to my grocery list this weekend, I'll treat myself to Starbucks; or I don't make any unplanned purchase, I'll get myself a _________ ).  Don't stress about slip-ups though. It happens. It's not easy to control the impulse to buy, especially in the advent of Pinteresting, online marketing and online stores. Learning to spend wisely, is a lifestyle change. 

How do you control yourself from making impulsive purchases? Do you regret any impulse buys?

Disclosure: I am following the steps outlined in nomoredebts.org's Money Management Strategies. Head over to their website for more info and resources.