23 December 2011

The Most Common Unnecessary Needs

Restricting yourself to a particular budget and eliminating excess expense to fit within the budget is a good habit. A key part of successful personal finance is to know the difference between something we need, an essential purchase; and, something we want, a discretionary purchase. Initially it will be an easy task slashing all their unnecessary spending habits. But when we have to eliminate certain things that fall into the category of necessary needs the trouble buzzer hits. It is a real challenge to decide what among the necessary needs can be eliminated. You might decline this thought but convince yourself that even what seems like a need can sometimes be eliminated.

Here are four of the most common "needs" that are really not that necessary.

Excessive Purchase of Real Needs

It shouldn’t come as a surprise to you when you hear that Needs like home, car and TV set are a man’s most common needs. We need a house to live happily and comfortably and to have some security in life. Because investing in house is a long term investment. But it would be greed if you look for a house big room and more space and that would definitely consume more of your income in maintaining the property.  You need a car to get to work, but that doesn't mean getting a new lease on a car every three years. When you overindulge into doing something, it clearly signifies that you are living beyond your means.

Wants You Think Are Needs

If you think a big house, branded clothes, fancy foods and drinks, a new car is a need, then you are wrong. It is just your wants. You will have to determine what sort of these things would be best for you, on your budget. You don’t have to buy something in order to fit yourself in a particular group or under any peer pressure.

Believing Everything You Already Have Is a Need

As mentioned earlier just in order to fit into a particular society, people opt for a different lifestyle. Mostly a luxurious lifestyle which they quickly get accustomed to. You won't miss any expenses you never incurred, but once you are used to the level of spending, it's hard to downsize.