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Think Want, Need, Must About Your Money

pyramids Today we’ll discuss a simple, yet effective, way to make sure you’re spending your money how you intend. Divide your spending into three categories – wants, needs, and musts.

We used to think about luxuries and necessities. This splits those luxuries into two categories because, over time, luxuries tend to become necessities.

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georgeLike the dishwasher we have. It’s not a need; it’s a want. But I’d sure hate to live without one!

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marylynnI think my cell phone is a need. But the unlimited texting and the ability to watch videos are wants that I added to my package.

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With our cable TV, we have DVR and premium channels. Those are definitely wants, but we love the convenience and variety.

Climbing the pyramid

Picture a pyramid, with wants at the base, needs in the middle, and musts at the top. We tend to move things up the pyramid. The importance we place on them climbs, so to speak. We look at things that are truly wants as needs; we view things that are really needs as musts.

That’s why we think it’s a good idea to break necessities into two – needs and musts. It helps us refine what is really important.

Mixed message

It’s pretty easy to define our musts – food, clothing, shelter, and transportation. But even within this category, there are mixed messages.

For an example, let’s consider transportation. At its most basic level, the only thing we need from our chosen form of transportation is the ability to get from one place to another. Public transportation clearly would suffice for many people.

However, if you use public transportation, you lose some control over your own schedule. You give up the convenience of having your own vehicle.

So some people may need a car because of their job. They need a vehicle to drive to appointments. Could it work without one? Possibly, but it might cost you too much time to be worthwhile.

It depends on your situation. In the end, only you can know what is best for you.

Gizmos and gadgets

There’s another way that wants, needs and musts can come into play. We’ll stick with the example of a vehicle. Even if you need a car, what do you really need? Something reliable or that fancy car in the ad? Just the basics or a vehicle with all the gizmos and gadgets?

The second of these choices, which are clearly wants, can make a huge difference in the price you pay for a car. And if you happen to finance it, they will add many dollars more in interest costs over the years.

We interviewed Adam Shepard on The Bigg Success Show not long ago. Upon graduation from college, he decided to see if the American Dream was still alive. Starting with only $25 and the clothes on his back, he was eventually able to buy his own vehicle among other things. His vehicle wasn’t anything fancy – an old pick-up truck with manual windows, one which didn’t work. But he still had the transportation he needed!

Keep these three categories in mind and you’ll keep your budget in line!

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Thanks for reading our post today. Join us next time when we’ll discuss how these same three categories relate to how we spend our time. Until then, here’s to your bigg success!

Subscribe to The Bigg Success Show in iTunes. 

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Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00286-121508.mp3

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(Image by Ahmed Rabea, CC 2.0)

Is Convenience Busting Your Budget?

time-money The good people at CareerBuilder recently posted the results of a survey of workers. Forty-seven percent of the people surveyed said they “always” or “usually” live paycheck to paycheck.

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Does more money help?

One way to stop living paycheck to paycheck is to make more money. Forty-two percent said an additional $500 each month would help make ends meet.  Fourteen percent already work more than one job.

The amount of money that comes into a household does make a difference, but not as much as you might think. Twenty-one percent with salaries of $100,000 or more said they also live from payday to payday.

We’re working ourselves to death instead of thinking about the other solution to the more month than money problem. We need to look at our lifestyle. We’re so busy trying to make more money to support our lifestyle that we end up spending money we wouldn’t need to spend if we just slowed down and honestly assessed our situation.

Convenience expenses

We’re so busy that we spend more money on “convenience expenses”. We define convenience expenses as the premium we pay for goods and services because we don’t have time.

So we end up in a downward spiral – we work more to have more, but then we
spend more and we don’t have any time to figure out how to do anything differently.

One example of a convenience expense is that we eat out more than we plan to. An appointment runs long. We get stuck in a traffic jam. The boss needs to talk. The next thing you know it’s late. Now we feel we have no choice. We’ve hit that wall. We’re hungry now! We’re too tired to do anything but grab some carry-out or order delivery.

Cutting back

It may seem like a small expense, but it eats away at your budget (pun intended). If you’re feeling like we’ve described you perfectly, don’t feel like you’re alone. We’re right there with you! Here are some ways we’ve found to cut back on this convenience expense:

Always stock some food that’s easy to stick in the oven or microwave.

Then if you’re running late, you can have less expensive convenience food. Plus you’ll save the time of stopping or running out for carry-out.

Plan for leftovers

If our next week’s schedule looks busy, we’ll cook up a little extra food on the weekend so we have leftovers which can be nuked in a matter of minutes. These leftovers are also an excellent way to save money on going out for lunch. There are more productive ways to spend a lunch hour than driving back and forth.

Invest time today to save money tomorrow

By planning next week’s meals, you can find coupons for the items you want to purchase. It’s like printing money legally as we learned from Crissy Thompson, who often spends as little as $10 a week to feed her family of five.

You can also think about where you shop. They’re called “convenience stores” for a reason! We pay a price to be able to run into the store and grab something on our way home.

This is just one example of the many convenience expenses. If you’re living payday to payday or not saving as much as you would like, think about your convenience expenses and the time / money interplay.

There is a huge trade-off between time and money. If you have money,
you can save time. If you don’t have money, it’s important to really
 think about how you’re using your time and try to save money.

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You can get the tips and tools you need to be a bigg success
Subscribing to the Bigg Success Weekly! It’s conveniently e-mailed to you once a week. And it doesn’t cost you any money! But the time you spend reading it will help you make and save money! How’s that for a deal?

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Next time, we’ll discuss how to create wealth in today’s new economy. Until then, here’s to your bigg success!

Subscribe to The Bigg Success Show in iTunes. 

Subscribe to the Bigg Success feed.

Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00261-111008.mp3

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(Image by lusi)