If you want to get ahead financially, one of the most important questions you can ask yourself is, “What do I need?” It seems like such a simple question, one where the answers should be immediately obvious. You need food, shelter, clothing, and maybe transportation. Everything else is really a want, in some form or other. The catch is that the media and Madison Avenue have made us believe that we need so much more than the basics.
We need cell phones with big data plans because if we’re out of contact for a minute we’re failing at life. We need pay TV or else we’re missing out on all the shows everyone else has seen. We need tablets because we have to be entertained and productive all the time. We need the newest clothes because being “on trend” makes you worthy of notice. And we need a big TV because all those great shows and movies just aren’t worth watching on a smaller set. On and on it goes, with the media, the marketing teams, and our own friends and families telling us what we need.
Now, some of these things may really be needs for you. You may need a fancy cell phone because your job requires it. Maybe you need a big TV because your eyes can’t see anything too small. You may need a fancy car or clothes because you have to shmooze and impress clients, or because you’re in the public eye. The trick is to be honest with yourself and to know when something is really a need and when it’s something that someone else has told you that you need or must have.
It’s not as easy as it seems. If it were, no one would be stuck making payments on junk they bought but don’t need. We’re conditioned to react to messages that tell us we’re incomplete, failing at life, poor parents, or inadequate in other ways. Advertising and peer pressure dig out our deepest fears, magnify them, and then offer “helpful” solutions. Get the right products and you’ll fit in, be more productive, become a better parent, or look better. They’re masters at convincing us that we need whatever they’re selling.
But do you really need these things? Whenever you’re confronted with a purchase decision, ask yourself if you really need the item or if it’s just a want, and be honest when you answer. Ask yourself if, given your lifestyle, job, and other obligations, the purchase makes sense for you. Don’t ask yourself if your friends have one and don’t ask them if you should buy the item. Don’t ask yourself if you can afford it, or stand around digging for justifications as to why you need the item. Simply ask, “Do I need this?” or, phrased differently, “What will I use this for/What benefits will it give me?”
It helps to turn off the media and the advertising when you have a chance. Turn off or tune out the commercials on TV, pull back from the constant advertising on social media (both from brands and your friends who are pushing products on you). Turn off the news so you don’t hear all the new “problems” in the world that demand you buy a solution. The farther you step back from the messages, the better you’ll become at separating your true needs from those that are created by others.
You can also do some experiments in living without things that you think you need. Turn off the TV for a week and see how you fare. Leave the cell phone at home and see if you end up liking being untethered. Find something else to do besides surf the internet on your tablet for a few days. At the end of the experiment, ask yourself if you need to add the item back in or if you’re happier without it. Ask yourself if you’re a horrible parent, uninformed, bored, out of the loop, unattractive, a social pariah, or whatever else it is that you think this product is fixing for you. If you’re no worse off than you were (or you’re actually better) you’re dealing with a product you didn’t need.
What you need and what I need are not likely to be the same. This is another one of those cases where personal finance is really personal. And that’s the point. You shouldn’t be buying products because I need them, or because I think you need them (or because your friends, coworkers, family members, or marketing execs think you need them). You should only be buying things that you know you need. It’s a simple question, but “Do I need this?, much like asking “Why?” can save you a lot of money.
(Photo courtesy of Bilal Kamoon)