Wednesday, June 3

Want vs need: Is it too simplistic?

As I reviewed the budget yesterday, seeing if we could pare the budget down to $1,000 a month, I began to really consider the PF idea of "wants vs. needs." It's one of the most basic PF tenets -- and for good reason. When people's financial lives are out of control, they tend to have very skewed ideas of what is a "need."

But how long should that last?

Is it really a good idea to keep this idea of things being either expendable or not? Of course, there are three basic needs: food, shelter, clothing. Once those are met, the rest are luxuries.

But are they, really? Obviously, my medications are not luxuries. If I don't have them -- or don't have enough of them -- I stop being able to function. I am either too exhausted to accomplish much of anything, or I am too severely depressed to cope with the world. Similarly, Tim needs his inhaler. And if he doesn't see a doctor regularly, his skin tends to become so terrible that he can't wear clothes. So, medical items, and medical services, should probably be added as necessities.

At the moment, that about taps out my ideas of absolute necessities. Anything else is technically a luxury. But aren't there gradations? When people get rid of non-vital expenses, they tend to prioritize. Sometimes it's based on cost -- a weekly breakfast with friends is going to be more tenable than a weekly massage -- but other times it's based priorities.

For example, Tim and I pay $60 for Dish TV. It isn't technically a necessity. But since we're both home all the time, it's a closer to the bottom of the "Expendable expenses" list. So, it's not really a need, but our lives would be a lot worse without it. My energy issues prevent us from forgoing TV in favor of hiking or other sporty activities that offer hours-long entertainment. While Tim and I could spend more time online, it would mean more evenings of each of us doing our own thing and not interacting -- not great for a marriage. It would also probably make us more prone to cabin fever, which can result in more outings (and, thereby, more unnecessary spending).

Whether or not you agree with this line of thinking, we all have things that we acknowledge aren't actually "needs," but are loathe to call "luxuries." We think of them as things we "need" inasmuch as we can possibly find a way to afford it.

Of course, most of us have more than one luxury. Even the most dedicated PF bloggers aren't going to go completely bare bones. Living that way tends to lead to frugal burnout. Most of us have a range of "wants" -- some large, some small. Most of us also have prioritized them, in case fat needs to be trimmed from the budget.

So we have things we could give up relatively easily (if somewhat reluctantly) and things that we will cling to tenaciously until there is absolutely no reasonable way to afford/justify it anymore. But we have the same term for both. How much sense does that make?

Thus far, I've only come up with "needxuries" (or maybe "neexuries" but I think the former looks better).

Some of you may be wondering why such a distinction is important. There is an awful lot of comments in the blogosphere that cast aspersions on people's budgets. While people have a right to their own opinions, they often have different priorities than the person who has to live with the budget. Wouldn't it be nice, when talking about expenses, to have a kind of shorthand for "very important" expense? Rather than answering various readers' suggestions that you cut the items most dear to you, they would know better what you could do without.

Granted, this isn't a huge issue. But I know some bloggers deal with very judgmental readers. (I'm lucky to have escaped most of that with you awesome folks!) And there is simply the annoyance of having to listen to people tell you to cut the item that you want to hold onto the most.

So, yeah, we could all start laying out our budgets by priority level. But isn't making up a new word more fun? Someone had to come up with "smores" and "blog," right? So let's brake some new ground here.

What words or terms would you use to denote the importance of your various expenses?

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Blogger Meg said...

Really good chocolate is a need... right? :D I've definitely cut down on that. I probably average about a bar a week tops right now. But I'd definitely miss it. And healthy food isn't optional, in my book. I could do Ramen noodles for a week if need be, but those alone does not qualify as "food", imho.

AC feels like a necessity here in Florida. I get sick when it gets hot and the humidity will start to affect things inside -- and mold is hard to get rid of.

Pest control feels like a need when you step on a roach in the middle of the night or watch ants cover the living room floor and carry off the roach bits (both of which we've witnessed), but we were going to go without it for a try now that the house is better sealed up and we have some alternatives. Except, hubby couldn't get a hold of anyone to cancel -- funny that -- and apparently it auto-renews. At least the guy who showed up dropped our quarterly rate down $40. But thanks to this auto-renew crap we are DEFINITELY going to cancel before next time.

Makeup isn't a necessity since I work from home but it feels high up there, not even because I'm that vain anymore but because I get so sick of people asking if "I'm alright" when I don't cover up the dark circles. It's hereditary, people!

High speed internet isn't optional for us. We need it for work. It's also our main form of entertainment. We got rid of cable -- and haven't missed it. We watch Hulu and other shows on their network sites, plus DVDs from the library.

But I think it's important to realize that just because you feel like you *need* something, doesn't mean you should go out and spend lots on it. There's almost always a cheaper or free alternative to consider -- even if you end up deciding on the higher priced option as a better value and fit for your needs.

June 4, 2009 at 10:28 AM

Blogger Revanche said...

I was liking nuxuries, but then settled on luxureeds.

I really accept a lot of flexibility in my budgeting definitions, especially now that I'm not penny-to-penny. I used to be stretched Every Single Day and in those days, nothing that wasn't an absolute necessity to keeping the roof over our heads or food on the table, or me in school was allowed. Yep, me in school was just as important as eating: there was no way I was going to skip out on school and fail at life like my brother. [Those two are forever interlinked in my family-life encyclopedia, I'm not casting aspersions on anyone else's choices about school. It's just that I'm actually related to him by blood, so I feel prone to the same weaknesses and failings of my entire family. And my entire life I followed his footsteps. I know, I'm a little in-my-head today.]

Anyhow, back in those days, eating meals that I hadn't packed was a Luxury. I would actually wait to go home and eat at home even if it was 6 hours later, no matter what.

These days, I still have a twinge of guilt about eating bought lunch at work. I have to remind myself that spending $7 on a meal because I forgot to bring something wasn't a sin. But it's not, as long as I make sure to limit the occurrences to once a week. It's a Luxureed.

New clothes are also Luxureeds, unless I have destroyed the previous iteration of the item. [Flats. Sorry guys.]

But you know what? Other than the absolute necessities, I don't feel the need to label everything. I just calculate baseline costs for Actual Needs, and then allow up to ~$75 per month on everything else that's not purely work or Need related. Whatever I choose to spend on comes out of that pot and is that month's Luxureed. Simple. In exchange for that flexibility, I categorize everything I spend on myself as a luxureed so it's not too tempting to lie and cheat the budget. So it balances out.

June 4, 2009 at 11:26 AM

Blogger Abby said...

Okay, first off, I love Luxureed! Awesome!

And I think you're right. Not everything needs a title. It's just that sometimes there are things somewhere between needs and luxuries. Now we have our term.

And Meg,

I would say pest control of some sort is definitely a need. Ick.

Also, I'd be careful about Hulu. As I'm sure you've heard, ex-AOL head has decided the smartest move is to start charging. (I'm guessing he means the smartest move to drive customers away?) So depending on the prices and just how much you watch, you may end up back at a small cable package or renting seasons via Netflix.

June 6, 2009 at 11:10 AM

Blogger Meg said...

Well, Hulu is free for now and I'm not worried. I certainly don't see a reason to be "careful" -- it's not like we're risking anything by watching it for free instead of paying for cable.

And if they start charging, we'll cross that bridge when we come to it. So why pay for cable now? And there are plenty of alternative elsewhere online, through the library, etc. And I'm talking the shows we watched before on cable and top rated movies -- not just cute cat videos. Even now, Hulu is just one of many video sources for us. And even if we did at some point want a t.v., a basic t.v. is easy to find and there are plenty of free channels via antenna. (In fact, we didn't buy any of our last two televisions.)

But the guy who was talking about charging was just mentioning it as an option -- not talking about specific plans. And my impression was that he wasn't talking for others in the company, that it was just his personal opinion.

I can see them charging for some premium content -- stuff you'd have to pay to see now anyhows whether via Netflix or iTunes. But I don't think it'd be a wise move at all to have no or even too little free content -- especially until Hulu has A LOT more regular viewers.

June 6, 2009 at 11:57 AM

Blogger Meg said...

Re: pest control, if we cancel the contract we'll definitely keep an eye out for problems but I'm not all that worried. We never had pest control growing up, and though I did see a few more bugs than I want to see again it wasn't uncontrollable.

And no doubt things would be better here since the home I grew up in was as holey as swiss cheese and practically in the woods (very old farm house). It also didn't help that we had a roommate who, being perpetually drunk, had no sense of basic hygiene and cleanliness.

In contrast, my husband and I live in house in the city that is much better sealed and we're pretty good about not leaving stuff out to attract bugs. We had some problems with the house to begin with (why we got pest control in the first place), but that was because it needed repairs and it had sat vacant for some time. We're also prepared to use various home remedies if need be, but are eager to avoid the sort of nasty chemicals used by most professional pest control companies.

June 6, 2009 at 12:04 PM


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