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Money Management - Heart Matters


3. Wants vs. Needs (continued)

Were you puzzled by why each budget item was followed by a “…so” phrase? Did you notice that if that phrase changed, so would the level of the hierarchy… even when the budget item stayed the same? For example, if you were buying groceries “so you could create a gourmet meal”, then that would move the need being satisfied up into the self-actualizing level. Likewise, if you were eating out “so you can feel better after a bad day,” you are satisfying esteem and ego rather than a physiological need.

Can you see that you can save to meet all level of needs? Can you see that you can meet needs at all levels by spending at different levels, too?  Here is where needs become wants.  For example, you need to feel loved and like you belong when you are with family.  There are costly ways and inexpensive ways to do this.  Helping your sister out with child care while she goes to work and having a nutritious, low-cost meal ready for her when she gets home satisfies this need as much as spending more than you can afford on a gift you want to give her.  While we may want expensive jewelry, what we may need is some tender loving care from our family. 

The slide into debt is slippery when we tell ourselves statements that on the surface sound rational—“I have no choice but to charge it.”  “ I’m just buying necessities I need” or “I don’t earn enough to buy the basics so I’ve gotta charge it” or “I’ve gotta have that because I’ve had a bad day and need a payback”.

Let’s step back for a moment and recap the relationship between needs, wants and our financial plan.  The important things to remember are:
  1. To distinguish needs from wants
  2. That every financial planning decision can fulfill needs on several levels
  3. That once a need is satisfied, we become motivated by other needs
  4. That Love and Esteem needs are often wants that we elevate to needs
  5. That Love and Esteem needs can sabotage our financial plans when we attempt to satisfy them by buying “things” to gain love, attention and approval
  6. That when we feel stress, we often become fixated on a specific need in the hierarchy which interferes with our ability to actualize our potentials
  7. That because every financial planning decision can fulfill needs on several levels, it’s very easy to create irrational beliefs during the financial planning process and, in effect, lie to ourselves that a want is really a need
  8. That a financial plan based on irrational beliefs and self-deception contributes to increasing debt
  9. That it’s difficult to judge what needs people are satisfying because one behavior, such as saving, may satisfy any number of needs
  10. That you can save more if you spend less
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