Understanding need versus luxury.
Need: a requirement, necessary duty, or obligation.
Luxury: A pleasure out of the ordinary allowed to oneself.
I tend to be a fairly frugal person.
I allow myself to enjoy what I have earned but also try to figure out if I truly need something or am just buying it to satisfy some desire that is fleeting and more easily explained by greed, competitiveness of wanting to keep up with others, or some other emotion that tends to backfire and leave me feeling more lonely and empty after the purchase of the product.
Need, to me, is a requirement, a necessary duty or obligation, as the above definition states. I need to eat, to breathe, sleep and to live and, when I break it down to basics, not much more. Luxuries are pretty much everything else. This includes computers, smart phones, cars, and other things most people might consider needs. These luxuries, considered needs, might be the kinds of food one eats, where one eats, what utensils one uses to eat, and what condiments one adds to that food. Maslow states as much with his hierarchy of needs.
I bring up food and why I believe it is a luxury because many people take for granted that the way they eat, and what they, eat is automatic and as a need. People may choose to eat at expensive restaurants they ignore that the majority of the world subsists on around a dollar a day. Living in China, and watching how people eat, reminds me that most Americans eat far more than they need and that type of food is a luxury that beyond the financial capabilities of many people here. This is changing with the import of McDonalds, Pizza Hut, KFC, and other Western restaurants. Sadly, as these Western restaurants, and foods become more prevalent, obesity has skyrocketed here.
As a therapist, I make more money than 6,500,000,000 people in this world. In spite of that, I often feel as if I lead a fairly simple life, choosing not to have many of the luxuries that many of my friends and family can afford. I have developed this value over years, making these choices my morals. Or maybe my morals made these choices? Chicken or the egg? I believe in defining the difference between a want and a need, not buying luxuries just because others have them. I try to remember what is actually a need. If it is a luxury, then I judge its cost and whether I choose to spend money on that luxury.
An example of this is my new Computer. I had never bought my own computer. I’ve always used hand-me-downs from my older brothers or my sister because I didn’t need the newest piece of machinery and didn’t want to spend the money on something that was overkill for my wants. After many years of using these computers, I decided, since I was moving to China and wanted to have something that was reliable, up to date, and small, I’d buy my own laptop. I took over two months researching them and then made trips to the local stores to wait and see if the laptop that I wanted would be put on special or someone possibly returned it and I could buy it on discount. After a few months, I found it. It is exactly the model I wanted and I bought it. It was 33% off because it was a return and seemed absolutely perfect. I’ve owned it for 8 months now and it works perfectly.
A laptop, and any computer, is definitely a want and not a need. However, I balanced the want of this computer with what I’ve decided I don’t need in the past 10 years: I have not traveled much (after living in Japan, Great Britain, Australia and a few others places previously). I went to graduate schools, funding my studies almost entirely with student loans that I had $65,000 of debt after receiving my Master’s degree in psychology. I felt the moral obligation to pay them back as I made the choice to take out these loans.
My choice to pay back loans as soon as possible since I see them as a gift from other taxpayers to me. It was not fair for me to abuse that generosity. With this attitude, and that intention, I paid back all of the $65,000 in student loans in 6 years. I did this while living in the Bay Area making less than 50,000 dollars a year. For at least two of those years, I survived on about $25,000 a year as I worked towards my 3,000 hours to earn my Marriage and Family Therapist license. To many that may sound like a tough life. It isn’t. It is a choice. Again, even when I made $25,000 a year, I lived a more plentiful life than about 2/3s of the world. Most of them don’t have the options I have and the luxuries I can afford to buy.
To be clear, I’m not chastising those that choose a different path or have a different moral belief about their financial situation. I have made choices so that I can afford to live a life less burdened by material possessions:
I am not married.
I do not have kids.
Other than my student loans, I did not carry debt.
I have 3-4 credit cards, which I paid off every month. They helped me achieve and keep an almost perfect credit rating without ever paying a late fee or interest. They are a means to an end and I own them, they do not own me.
Living in China, I pay cash for everything. I could use my credit cards, in some locations, but I’d rather not. I’d rather know exactly how much I spend and how much I save. I budget a certain amount every week and then see how well I can keep within my means.
Compared to the guards at my apartment complex, who live on approximately $200 USD a month, I’m a billionaire here. I never let forget this is a luxury many don’t have around the world. I also remember that the guards seems to be as happy as anyone I know. Although the Western belief system continues to force us to believe otherwise, money does not buy happiness.
Be willing to ask for what you want and seeing what is given is a huge part of my being frugal. I’m also generous with my time, support and knowledge, which people seem to feel is a fair return for the material gifts I sometimes receive.
In reality, I do not need a computer. It is a luxury. I’m glad that I see the difference and can still enjoy it for what it is. A gift to myself.
Some thoughts to ponder:
What do you consider a need?
What do you consider a luxury?
Is there just one luxury that you could redefine as a need?
How would this redefinition save you money?
How would it help you feel more in control of your spending habits?
Ten years ago, what was a luxury and what was a need?
Ten years from now, what will you consider a need versus a luxury?
How does the way you use money satisfy your desires?
Also, one of my favorite websites about frugality and how to spend money wisely is The Simple Dollar. I love Trent’s story and how he decided to change his thoughts on money, his behaviors and how he used money and how his life changed because of this. He tends to use a behavioral therapy mindset to figure out how to spend money. I also really enjoy his suggestions and honesty.