One of the worn out adages of personal finance is, in my opinion, the one about distinguishing between needs and wants and then suppressing your wants and staying with your needs. I believe that this is inappropriate on two counts:
- Our needs are inevitably rather simple and basic – we need shelter, food, drink and clothing. There are other needs that occur from time to time – like the need to procreate. In our ‘needs’ we are very similar to any other animal, really – we need the things that help us stay alive but not necessarily to thrive and blossom. What makes us human is not our needs, it is our wants – our want for comfort, warmth, delicacies and love. What makes us human is our thirst for knowledge, joy and fun.
- Suppressing our wants often results in making us feel deprived. By refusing ourselves what we want, we crave it more until gates of restraint break down and we find that we succumb to the want with wild abandon rather than controlled enjoyment. Danger lurks in wild abandon – from over-eating to over-spending; from obsession to compulsion.
I believe that this wild abandon following the suppression of our wants is one of the main reasons for over-spending and getting in debt; the other one is innate stupidity and ignorance but this is another conversation.
What I am saying is that the persistent adage of personal finance urging people to focus on their needs rather than on exploring their wants – and learning to control them – is somewhat misguided. Trust me – my financial fortune changed and my spending got tamed when I mastered my wants rather than ignoring or suppressing them.
How To Handle Needs And Wants
Here is how I did it:
- I imagined myself in a situation where I was told that I have to leave my house and will never come back. I am allowed to take with me 20 items, I have 20 minutes to pack and I won’t be allowed to buy anything for one year.
- I got a pen and a piece of paper and very quickly wrote down the 20 items I’ll take with me – it is important to do this quickly and without too much thinking about it; this is how you end up writing the things you want rather than the things you think you should have. That is right: stop being so sensible! This is about wants after all and if you feel like taking your six inch heels with you so be it.
- Once you have written 20 items it is time to start thinking: look at them carefully and decide which items you are going to take if you are allowed only 10; how about if you are allowed only 5?
- Do you have your 5 items? Look at them carefully – these items represent your core wants; the wants there is no point trying to ignore or restrict because you will feel deprived.
- Allow yourself to have these items: stand up, look in a mirror and give yourself permission to have them.
- You are done – your wants will never trouble you again and you just became the master of your financial destiny.
I developed this exercise and did it two years ago and never since then have I been a victim of wild abandon and all that comes with it. Give me controlled enjoyment anytime!