Tuesday, December 22, 2009

People have confused two four letter words: Want and Need

The N Word
What sector is hiring the most new employees in the US right now? Technology? Manufacturing? Financial Services? Nope. National Public Radio recently reported that collection agencies have the highest growth in new hires. How could that be? Consumer debt is at an all time. Why? People have confused two four letter words:

Want and need.
If you are peering into the overstocked warehouse called your closet, a wee bit of reeducation on that distinction might be a good idea. "You mean I don't need a new pair of blue boots?" Sure, you want them. They just aren't in the need category. You need an umbrella, groceries, and to get your teeth cleaned. Begin spending your money more consciously on what you need and you will discover that you have more money for the things you really want (owning home, enjoying a vacation, starting your own business).

Loral Langemeier introduced me to the concept of Financial Freedom Day. That would be the day that you no longer need to work. Imagine that! If you give yourself the luxury of imagining your opulent prosperity and you may make different choices. Boy, that has more juice for me than saving for retirement. What day do you want to have financial independence and the cash flow to be living from as you choose? It might be something to consider the next time that a trip to the local department store temps you. Do you feel you should buy someone a gift?

"Do I need this?" is a great question to ask yourself. Write the question on a Post It and attach it to your wallet. Spending less money on your immediate gratification want can assist you in building up the cash to have more of what you really want.

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