Spending Money: Needs vs. Wants

Let’s face it: Most people spend way too much money on things they don’t really need. The more money we make, the more we tend to spend. This endless cycle of materialism has led many people to confuse the word “need” with the word “want.” As in, “we need a big-screen TV for our new home theater.” Or, “I need a new pair of shoes to go with my new outfit.”

The pursuit of material success often is the root cause of burnout at midlife. In fact, a recent study at the University of California at Berkeley found that people primarily motivated by the love of their work grow dissatisfied as they begin to make more money.

The first step to breaking free from the materialism trap is to understand the difference between “need” and “want.”

Our needs are relatively few, even from birth. We don’t need a lot of stuff, toys, gadgets, etc. We need shelter from the elements, clothing, food, love and understanding. We need friends and family around us.

We do not need 500 cable TV channels, brand new luxury cars, 5,000-square-foot homes in exclusive neighborhoods, lavish ski vacations, and smart phones that do everything but think for us.

There is nothing wrong with wanting these things. But understand that these things do not make us happy, in and of themselves. And, they are often links in the chains that bind us to jobs we despise.

Studies have shown that the more advertising a person is exposed to, the more they buy and consume. What does this mean to you? The more television you watch, the more magazines you subscribe to or read, the more money you want to spend on things you don’t really need. Marketers are taught that success comes from selling to wants not needs.

One way to notice your wants versus needs is to go through your household, garage and attic and locate all those objects that you really needed to have, and which you bought, but lost interest in a few days later and they have been collecting dust since then.

I don’t suggest being too hard on yourself, because if you forbid yourself of every pleasure, your brain may rebel and send you into a buying binge. Instead, start with a simple observation. Every time you are about to buy something, ask yourself whether you really need it and observe the response. One day this observation will result in your changing your mind and not buying the thing that you don’t need. Then it’ll happen again, and after some time you will be very comfortable at saying ‘No’, because you will feel good about making a better choice.

The amazing thing is that once you learn to live on less, it becomes a habit. The peace of mind that comes from relying less on materialism to define success usually leads to a greater and deeper happiness.