Recent article got me thinking about it. There is a lot of grey area here. (I'm not yelling, but using quotes in a title screws up post formating, so I had to use caps).
Sure, a trip to Hawaii and premium channels are a want. But in so many categories it is so much less clear.
The "health and safety" criteria still leaves a lot of things open to interpretation. Even things like diapers. Clearly a need? Well, it does not pass the "health and safety" test. If you think of it, it is clearly about convenience. When I was a baby, many mothers washed and boiled cotton diaper inserts after the baby went to sleep. And what did women do during their period before this century? So, it can be done. It is just WE REALLY DON'T WANT TO. So we just consider it a need.
But is it? Than everything we just really unwilling to do constitutes a need. And if we couldn't get our budget to balance, we still would not cut those things, because they are "needs". People would not cut similar conveniences to not add debt. But, if you were in a developing country and your choice was not "debt vs convenience" but "your child crying from hunger vs. such convenience" you would do it!
It is just one example, I'm trying to show that we all think of things we want and things that we are used to as needs. No one is immune from it.
Shelter -- is a need. But living in the neighbourhood you want and having a room for every child? You might feel strongly about it, but how much of it is a need?
Food is a need. Is healthy food a need? To what degree? Is organic food for a child a need? After you read about farmed fish practices, or allowed pesticide use you might feel that way, but others might argue on this point.
The list goes on and on. It is so subjective that it is impossible to separate your budget into needs and wants. So most budgets are about what you personally want, what you find important. and "need vs. want" budget allocation is mostly moot.
What is a NEED and what is a WANT?
August 21st, 2012 at 04:36 pm
August 21st, 2012 at 05:53 pm 1345571585
I still don't think it renders the allocation moot, though. If you want to call the categories "practical want" and "frivolous want," or "important wants" vs. "expendable wants," I feel there's still value in ranking spending. If I needed to cut $2000 from my monthly budget tomorrow, I'd know to go to the "wants" column and cut it from there. If I said, well, food is a want, and cut that, I'd still need to get food from somewhere. My emergency budget drastically reduces, but does not eliminate, my grocery line item. On the other hand, "travel" and "Netflix" are completely eliminated on my emergency budget.
So I think, for the purpose of smart money management, the categories are important (even if somewhat mis-named). Interesting thoughts, though. It's always worth reconsidering everything about one's budget, from all different angles.
August 21st, 2012 at 06:50 pm 1345575019
August 21st, 2012 at 07:09 pm 1345576159
Everyone has a very different list, for better or worse.
August 21st, 2012 at 07:44 pm 1345578277
August 21st, 2012 at 08:40 pm 1345581624