Wants vs. Needs

 

            Last time we focused on debt management, today our goal is assessing our wants versus our needs. Let’s define this topic, a need is something you have to have and wants are something you would like to have. Although, the difference seems simple many of us fail to understand the significance.

            The idea for today’s entry, knowing what’s most important to us, to me the most meaningful thing I focus on is debt management and retirement planning. Everyone has different goals the first thing is asking yourself what’s important. Some say family, debt management, retirement and others say being happy.

             Being Happy, what does that mean? Everyone wants to be happy; everyone wants to have things for example yesterday I saw a gorgeous coach handbag. I simply could not take my eyes off it, but wanting something and needing something are two different things. I need food, but want that coach handbag.

            In, actuality you only need four things to live i.e. a roof over our heads, enough food and water to maintain your health, basic health care and hygiene products, clothing (just what you need to remain comfortable and appropriately dressed).

            Everything that goes beyond this – a big house, name-brand clothes, fancy foods and drinks, a new car – is a want.  Does that mean that you should only buy the things that you need? Not at all, life ought to be lived, not survived. Indulge yourself to some wants along the way, but do so when you have enough money.

             Making this assessment about ourselves early can help build towards focusing on what’s essential. Being young is an excellent advantage towards our futures, by controlling our impulses early we can build towards a successful life. We can then focus on retirement planning; young folks have upwards of 40s of compound interest to look forward too.  So, I say know what’s important for you.

Sincerely, Generation Y 

Debt Management

The number one mistake youths today make is monetary, they incur more debt than they can handle. I, like everyone else made this exact mistake, how you ask? Through consumer debt, I never learned the fundamentals about money management. My mom always said that money would be something we discussed when I was older. Older, seriously! I am, now 29 turning 30 and yet, we haven’t had a discussion about money, she is yet to offer any words of wisdom.

To me youths, get told what to do and how to act since childhood, but does anyone ever say, “Do you want some advice about money management”, nope. We are expected to know how to handle our finances accordingly. Between student loan debts and low income jobs credit cards become a way to fill the gap.

Credit cards sound wonderful; they’re, buy now pay later concept sounds prefect. But before you know it, with interest, late fees and penalties, you are drowning in consumer debt. Being in debt is bad, but staying in debt is worse. To a student, credit cards are convenient, we don’t necessarily have the funds to buy what we want outright so, we use credit.

Credit card companies have redesigned themselves to target students; they created cards solely for students, offering great rewards. What rewards? 19.99% interest, seriously, that’s a horrible incentive.

Generation Y, has never been thought how to read the fine print. This is why our number one problem is consumer debt. We accept this lack of financial education. We need to educate ourselves on how to manage our money.  By creating a budget, assessing our wants from our needs and setting goals, then and only then can we begin to achieve financial clarity?

There is never going to be a good time to get started on your financial life, so you might as well get started toady. Challenge yourself, go and gather all those credit card statements you are avoiding. Take a pen and piece of paper; list the interest rates in one column, your balance in another and length of time to repay i.e. 12 months, 24 months or 36 months and start calculating.

Sincerely Generation Y