Today’s post is all about our needs versus our wants.  This topic was brought up frequently during my Budget On Purpose Challenge.  During the challenge, we hash out what are necessary expenses vs “nice to have” expenses.

Budgets are not restrictive if they are built on purpose. (highlight to tweet).

I have found once we establish what we are grateful for and why we want to budget in the first place, the actual act of budgeting is quite motivating and exciting.  You are making decisions and actions with purpose.

So why should you care about needs vs wants and how are they going to help you move towards your dream of location independence?

The confusion in deciphering between the two is the number one hurdle that is between you and your dream.

It is essential to get clear on why you are budgeting and facing your finances.  When I started my journey to become a health coach, my dream and ultimate goal was location independence.  I wanted to be able to wake up and work from all over the world.  Once I got clear on that goal, everything fell into place.  More clients came into my business, I had a very clear reason for cutting my expenses, and when I decided to make pizza at home and create a cozy date night in, I knew that it was getting me $27 closer to my goal.

But without that clarity you just feel deprived.

So, let’s get down and dirty and get clear on what a true need is vs a want.

Examples of needs:

• roof over your head
• reliable transportation (not a fancy set of wheels, but something that will get you where you need to go)
• food
• water
• basic toiletries/medical
• Internet (especially if you work from home)

Examples of wants:

• clothing (come on now, we all have clothes – any clothes you are buying unless truly replacing are in the wants category)
• Pretty much anything on Amazon.com (yes, I had a bad habit with my Prime Membership at one point)
• wine
• yarn (I’m a knitter so I have to put this on here and trust me, I could totally debate putting this in the needs category – we all need hand knit socks, right?)
• gym membership (we can all do body weight exercises and run outside)
• yoga membership
• Netflix
• Cable
• The latest and greatest phone (when your phone still works…)
• I think you get the picture

Now, I know that we could have a lovely chat on how some of the things above go on the needs list.  And am I saying that you should only spend in the needs category?  Heck no!  But what I do want to point out is that we have a choice and when we truly want something to change, we can’t keep doing the same thing and expect different results. (highlight to tweet).

If you feel like you are doing everything in your power to save and you are left with no extra money at the end of the month, then this quick exercise can really help you move forward.

Here is what I do when I come across something that looks amazing and I become borderline obsessed with it but feel like it may not be a current immediate need:

1. Pull out my gratitude list (physically or mental – your call) – when you remind yourself of all the amazing things and people that you already have in your life, you can give yourself an amazing dose of perspective that can knock you back into a position of perhaps realizing that you don’t really need the shiny new thing.
2. If the above doesn’t work, and I am still super set on the want, I put the item on a wish list.  I use evernote.  I then revisit in one week and assess how strong my urge is.  Many times, I find that the need is not as strong after I have taken some time pass.  **If I am browsing Amazon, I will put the item in my cart and hit save for later once in the cart.  This allows me to keep it in mind but not immediately spend the cash.**
3. If after one week, I am still focused on the want, I brainstorm all of the alternatives.  How is this going to be useful?  What do I currently have that could alternatively fill that requirement?
4. If all of the above doesn’t work and I are still wanting the item, I sometimes decide that this purchase actually will add value and fill a need in my life.  If I don’t have the money set aside for it, I create space for the money to flow in by creating a goal in my budget.  I personally love the software You Need A Budget because you can easily create a line in your budget with goals.  Super easy to see where you are and how much further you have to go.

Next time you are facing a purchasing decision and you know deep down in your gut that it is falling in the “want” category, try out the above.  You will be one step closer to living your dream of location independence.  And you will feel an amazing sense of accomplishment in that you are taking control of your spending and financial habits.

I believe in you.  You are on the right track and I commend you for taking the time to hone in on what is stopping you from reaching your financial goals.

Interesting in learning more on getting organized and developing strategies to stay focused and accountable when it comes to your finances?  I am running a powerful online group program called Budget On Purpose and I would love to send you more information as it becomes available.  Click here to get on the VIP Waitlist (or sign up below). Your pocketbook and bucket list will thank you.

Good-bye stress, hello peace of mind!