Target runs will be the death of us. 🎯 Do we really *need* a 4th Stanley cup? You know what they say, a Stanley for every season! 💁🏻♀️🥤 Who’s “they?” Ummm, we’ll have to get back to you…
All trendy overpriced water containers aside, spending too much money on “wants” could be a slippery slope. 🥴 It may seem like kid’s stuff, but prioritizing your “needs” over those treats is an easy way to get your finances back on track. ✅
Here’s Five Fast Facts on telling the difference between financial wants and needs:
- 💅 Girls Just Wanna Have Fun - A recent Bankrate study revealed that half of all Americans have a credit card balance and 58% of those folks have no plans to pay it off. Rebels! Want another surprising stat? The study also showed that 38% of Americans would be willing to go into debt to have some fun. YOLO!
- 💲 Million Dollar Question - One of the easiest ways to get yourself into debt is by confusing your financial wants with needs. To nip this in the bud, ask, “is this purchase for my safety or survival?” or “is this purchase in line with my financial goals?” If not, it’s probably a want.
- 💰 So Needy - Here’s a quick and dirty list of needs: rent and mortgage payments, debt payments on loans and credit cards, basic groceries (nutritious foods vs snacks), transportation expenses like public transit fares, gas, car maintenance, and utilities.
- 🔮 For Your Future - Don’t forget about your long-term financial needs. These are things like your emergency fund and retirement savings. If you have a goal of paying your home off early or want to build up a rainy day fund, those goals fall under needs as well.
- 🍨 Trick or Treat? - While it’s OK to treat yourself to those wants every now and then, remember they’re not necessary for survival. Things like dining out, entertainment, non-essential clothing and gadget purchases, and trips should come only after your needs are met.
🔥Bottom line: Want a simple way to budget yourself straight? Try the 50/30/20 rule. In this method, 50% of your paychecks go toward needs, 30% toward wants, and 20% toward savings or paying down debt. Easy peasy! Wondering how the American middle class feels about their finances? Check out the latest stats right here.
Do you budget for your financial wants and needs?
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