wants http://www.wisebread.com/taxonomy/term/9454/all en-US 12 Personal Finance Skills Everyone Should Master http://www.wisebread.com/12-personal-finance-skills-everyone-should-master <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/12-personal-finance-skills-everyone-should-master" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/little_girl_dad_000071538069.jpg" alt="Little girl learning personal finance skills everyone should master" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>I was happy to see that my son signed up to take a personal finance class in high school next year. I think mastering basic personal finance skills is one of the most important things you can do to improve your happiness and quality of life. But you're a full-fledged adult. If you haven't already, the earlier you start developing and using personal finance skills, the more time you have to reap the benefits.</p> <p>Here is my list of personal finance skills every frugal person should master.</p> <h2>1. Budgeting</h2> <p>Setting and following a budget is probably the most basic personal finance skill, yet only about one-third of people actually have a detailed budget. I went for years without an accurate budget, using my checking account balance as a rough gauge of how much money I had available to spend. Eventually, I realized this was a terrible way to run my personal finances. A detailed budget is necessary to get a handle on where your money is going and to start deciding where you <em>want </em>your money to go &mdash; instead of just watching it go away!</p> <p>Writing out a list of all of your income and expenses is only the first step toward becoming skilled at budgeting. You need to monitor spending and work to stay on track every month. Sometimes unexpected expenses will pop up, and it takes skill to find ways to spend less in other areas to recover and stay on budget.</p> <p>You can get a real budget started by looking at your bank statements and credit card bills from last month and adding up spending by category. I used colored highlighters to mark up my spending into categories such as food, clothing, pets, entertainment, transportation, housing, utilities, etc.</p> <p>Food expenses are especially challenging for me, since food cost varies so much depending on what you decide to eat. In my household, we use a money envelope as a tool to help us stay on our food budget. Every payday, I take out cash for the budgeted amount for food spending, both groceries and dining out. All food spending comes out of the money envelope, so we always know how much is left to spend on food.</p> <h2>2. Negotiation</h2> <p>Negotiation is a key skill to master to get the best deal when buying or selling something, or even getting the best salary and benefits when accepting a job offer. Most people do not like to negotiate. It is easiest to pay the asking price, or accept the amount offered from a buyer or employer. But if you become skilled at negotiation, you can end up with lots more dollars in your pocket instead of in the other guy's pocket!</p> <p>Here are some skills that <a href="http://www.wisebread.com/the-7-laws-of-negotiation">successful negotiators master</a>:</p> <ul> <li><strong>Be willing to walk</strong>. Successful negotiators are willing to walk away if they can't get a good deal. Willingness to walk away gives you the confidence to ask for what you really want and drive a hard bargain. Often, you'll learn things in deals that don't work out that help you get a better deal in the future.<br /> &nbsp;</li> <li><strong>Be reasonable.</strong> Good negotiators understand the market value of what they are negotiating and can understand the deal from the other party's perspective. If you seek an unreasonable deal, you are likely wasting everyone's time and won't end up with anything.<br /> &nbsp;</li> <li><strong>Be perceptive</strong>. They pick up clues from the other party to determine what kind of offer they would accept and use this information to negotiate the best deal possible.</li> </ul> <h2>3. Separating Needs vs. Wants</h2> <p>Do I need a new computer? My kids say that I do. I am using the same computer they used to play games on way back when George W. Bush was in office. I sometimes use my cellphone to look things up while my computer slowly loads a webpage. But I don't need new computer. I can still get everything done with my old computer, including paying bills, updating my budget spreadsheet, and even writing books and articles for extra income.</p> <p>Separating needs from wants is a key personal finance skill. There is almost no limit to bigger, better, and newer stuff that you could decide to buy. The best way to make spending decisions is to become disciplined at distinguishing needs from wants.</p> <p>I like to think about the consequences of not buying something as a tool to distinguish needs from wants. For example, if I don't buy the new shoes I am considering, will I not be able to go to work? Will I miss events for my kids because I don't have any shoes that are acceptable to wear? Will I not be able to exercise safely? At some point new shoes can become a need, but if your old shoes are still doing everything you need your shoes to do, then new shoes are a want.</p> <h2>4. Driving Down Interest Rates</h2> <p>A lot of people carry debt &mdash; the total credit card debt for Americans is set to hit $1 trillion dollars this year. Of course, your best move is to <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">pay off debt as quickly as possible</a> to reduce your interest payments and to free up your money to invest or pursue other opportunities. But while you are paying off debt, it is worth putting in some effort to keep your interest rates as low as possible.</p> <p>The average credit card interest rate is nearly 15%. If you have credit card debt and don't keep an eye on the interest rate, you could easily end up paying 15% or more. Shopping around can almost always result in a better deal. If you have a good credit rating, you can likely find <a href="http://www.wisebread.com/which-balance-transfer-credit-card-is-the-best-for-you?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">a balance transfer offer</a> that will allow you to pay a balance transfer fee of about 3% and 0% interest for a year or more. (See also: <a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards?utm_source=wisebread&amp;utm_medium=seealso&amp;utm_campaign=article">Best 0% APR Balance Transfer Credit Cards</a>)</p> <p>I count maintaining favorable interest rates as a personal finance skill because you have to keep track of interest rates on your accounts and continuously find <a href="http://www.wisebread.com/is-a-balance-transfer-offer-a-good-deal?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">good deals on balance transfers</a>. This skill can save you thousands of dollars per year on interest.</p> <h2>5. Continuous Investment</h2> <p>People who are financially successful do more than reduce spending and save money. They take the next step and invest money that they free up through smart spending decisions.</p> <p>This investment mentality is what allows the small amount of money you avoid spending to grow into real wealth that can change your lifestyle and allow you the freedom to pursue your interests. Regular saving over time adds up &mdash; even with small investment amounts.</p> <p>Continuous investment requires discipline to keep investing money for the future rather than spending it now. Savvy investors assess what kind of investments to buy and manage their investment portfolio based on economic trends and the performance of their investments.</p> <p>The most important factor in being a successful investor is to make regular investments over the long term and let your wealth grow.</p> <h2>6. Bargain Hunting</h2> <p>Frugal people are known for having good bargain hunting skills. Making a purchase is a challenge to find the way to spend the least amount of money to get what is needed. Bargain hunting usually involves using coupons and shopping around to find the best price.</p> <p>Sometimes buying a used item rather than a new item is the best bargain &mdash; you can save 50% or more buying used instead of new. Items such as tools or vehicles that are useful for years make good used purchases, but technology products often become obsolete so fast that buying new can be the best deal.</p> <p>Buying at the right time can be a key to finding bargains. I am always shocked at how cheap winter clothes and coats sell for in March at clearance sales. I bought most of my winter clothes for 90% off! Keep an eye out for bargains at store closing sales and clearance sales for items you know you will use later.</p> <p>An important part of bargain hunting is deciding on the best item to buy. If you can figure out the least expensive item that meets your needs, and then find the best price on that item, you are on your way to mastering bargain hunting skills.</p> <h2>7. Reuse</h2> <p>There is an old saying &quot;Waste not, want not&quot; that summarizes the personal finance skill of reuse well. If you don't waste anything, you will have plenty and not want for anything. I recently got into a conversation with my father about the oldest clothing item that we are still wearing. I mentioned that I still wear a lot of my 20-year-old clothes I got back in college. My father mentioned that he was currently wearing a shirt that is nearly 40 years old!</p> <p>Reusing things that most people would throw away is a key skill to save money and live well with less. When I was younger, I would always prefer to have new clothes rather than wear old clothes. Now I find comfort from the familiarity of wearing clothes with lots of memories attached to them. It seems like older stuff was constructed better than newer items, anyway.</p> <p>I think a lot of people are in the habit of throwing old things away just because they are old. Learn to keep reusing items until they no longer work, and then use them for something else. When my t-shirts start wearing out, I get sunburned through the holes in the fabric. Is it time to throw the shirt away? No! I use it for a rag.</p> <h2>8. Food Preparation</h2> <p>It is amazing how much restaurant food, fast food, and prepared food items from the grocery store people are buying these days. It does take some planning and work to prepare your own food at home, but you can save a ton of money and eat healthier, too.</p> <p>In addition to having basic cooking skills and equipment, having a plan is key to mastering the skill of preparing your own food at home. I know it works best at my house when we make a list of meals and the buy groceries with these meals in mind. Sometimes we even write on the calendar what is for dinner to avoid not coming up with something and ending up with expensive restaurant food.</p> <h2>9. Do It Yourself (DIY)</h2> <p>It seems like everyone that comes to my house to do something charges about $60 to $100 per hour. I try to minimize paying people to come over and try to take care of maintenance and repairs myself instead to save money. I learned to do basic plumbing repairs and installation, including sweating copper pipes with a torch. I can do basic electrical wiring and repairs. Some people in my neighborhood have landscaping companies take care of mowing and weed control, but not me. The more things you can do for yourself, the more money you can save.</p> <p>Develop skills to do work for yourself instead of paying others to do it for you. You'll save money and get a great feeling of satisfaction when you can do the work yourself.</p> <h2>10. Saying No</h2> <p>Saying &quot;no&quot; is often the key to saving time and money. Would you like to subscribe to a magazine you don't want in order to help your neighbor's kid meet a fundraising goal? How about &quot;no.&quot; Would you like to volunteer to drive 20 miles each way to participate in a committee meeting on your day off? Again, &quot;no&quot; works well here. There are times when you might want to contribute your time and money to a worthy cause, but there are many times you feel pressured into taking on something you don't really want to do.</p> <p>Learning to say &quot;no&quot; and not feel bad about it can save you a lot of time, money, and aggravation.</p> <h2>11. Efficiency</h2> <p>Efficiency is the skill of doing as much as possible with the least amount of resources. Efficiency can mean making a single trip to do all of your shopping instead of taking multiple trips. Efficiency can mean driving a smaller vehicle that costs less and uses less fuel every day.</p> <p>Often, efficiency keeps paying back over time. For example, the efficient choice to live in a smaller house results in a lower mortgage payment and lower utility bills year after year.</p> <p>Energy savings is another example of efficiency in action. I spent a few hours and a few dollars to upgrade most of my light bulbs to LED. Due to this efficiency, I save money every month since lighting my house now costs almost nothing.</p> <p>Another form of efficiency is simply having less stuff. Do you really need eight different kinds of cleaning products under your kitchen sink? Having less stuff not only costs less, but less stuff takes less space as well. With fewer things around, it is easier to keep things organized and find what you need.</p> <h2>12. Contentment</h2> <p>I am sure that you can live with less, but can you be happy with less?</p> <p>Contentment is living with a positive attitude and being satisfied for all of the things you have instead of wishing that you had blingy stuff. I drive an 11-year-old car that runs well. It even has leather seats and all wheel drive. What more do I need?</p> <p>People might not get a sense of status from the vehicle I drive, but I am clearly beyond worrying about that. Part of being content with what you have is to stop caring about what other people think. People who know me respect my work and my accomplishments, and I am not really concerned about what strangers think about my car.</p> <p>Contentment means setting your own standard for happiness. This can be difficult to achieve as you look at the photos of expensive vacations, recreational vehicles, and new cars that your friends post on Facebook. It is hard not to want expensive stuff when it seems like everyone else is buying it.</p> <p>But the problem with pursuing happiness by buying expensive stuff is that there is always something else you'll need to buy in order to be happy. As soon as you get back from vacation, it is time to start thinking about where to go for the next one. After your new car isn't the newest on the block anymore, the excitement is gone. Buying happiness is like chasing a mirage. You can't really reach happiness through buying things, but you can spend a lot of money trying!</p> <p>Contentment is about finding happiness in the life you have right now, not the life you could have if only you had more money.</p> <p><em>Which personal finance skills would you master to improve your life the most?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dr-penny-pincher">Dr Penny Pincher</a> of <a href="http://www.wisebread.com/12-personal-finance-skills-everyone-should-master">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-brilliant-tips-from-smart-mom-rich-mom">4 Brilliant Tips From &quot;Smart Mom, Rich Mom&quot;</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-take-one-vacation-day-and-save-thousands">How to Take One Vacation Day and Save Thousands</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-pearls-of-financial-wisdom-from-dave-ramsey">3 Pearls of Financial Wisdom From Dave Ramsey</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-surprising-ways-summer-will-cost-you">7 Surprising Ways Summer Will Cost You</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-common-weekend-money-traps-and-how-to-avoid-them">8 Common Weekend Money Traps (And How to Avoid Them)</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Frugal Living advice budgeting investments needs negotiating saving money skills wants wisdom Wed, 15 Jun 2016 10:30:07 +0000 Dr Penny Pincher 1731280 at http://www.wisebread.com The Only 6 Rules of Frugal Living You Need to Know http://www.wisebread.com/the-only-6-rules-of-frugal-living-you-need-to-know <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-only-6-rules-of-frugal-living-you-need-to-know" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_blueprints_piggy_bank_000031080438.jpg" alt="Woman learning only rules of frugal living she needs to know" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>We humans have a knack for complicating the simplest of ideas. Our lives are filled with shortcuts that aren't short, tips and tricks that trip us up, and helpful hints that are anything but. The same is true when it comes to frugality. Let's scrap all the circular talk and bottom-line it. Here are the only six rules of frugal living you need to know.</p> <h2>1. Know Your Money</h2> <p>By whatever means necessary, become ridiculously well-acquainted with how much you earn, how much you spend, and where every dollar goes. It's the foundation of frugal living. Without this baseline knowledge, successful budgeting and saving will always be out of reach.</p> <h2>2. Live Below Your Means</h2> <p>Living within your means is a great start, but living <em>below</em> your means is where the real magic happens. The surplus it generates is the capital for saving and investing and the fuel behind long-term wealth building. If you're unable to run a surplus a majority of the time &mdash; either by cutting expenses or growing your income &mdash; you'll never get ahead of the game.</p> <h2>3. Know the Difference Between Spending and Investing</h2> <p>Spending and investing might feel like the same thing, but they're completely different animals.</p> <p>Investing is the outlay of cash in exchange for a tangible asset (think job training, a primary residence, or shares in a mutual fund). Spending, on the other hand, is the outlay of cash for something that will likely depreciate in value and not provide any long-term benefit (think dinners out or a new summer wardrobe).</p> <p>Being frugal doesn't mean you always have choose investing over spending (after all, spending is part of living), but it does require that you understand the difference and know how to put your income to work a majority of the time.</p> <h2>4. Buy for Quality</h2> <p>Frugality isn't about always buying the cheapest product; it's about diligently seeking out the best value. Sometimes that means <a href="http://www.wisebread.com/quality-over-price-15-items-to-spend-more-on">choosing quality over price</a>. A pair of shoes that cost $20 might seem like a great deal, but they're not if you have to replace them every three months. A $75 pair that will last two or three years will be a far better value in the long run.</p> <h2>5. Avoid Consumer Debt</h2> <p>Frugal folks know it: Interest on consumer debt is a tax people pay for living beyond their means. And while a credit card can save the day from time-to-time, embracing easy credit as a way to pad your lifestyle can have disastrous consequences. Interest and other charges will bleed your budget and choke your chances at real financial security. (See also: <a href="http://www.wisebread.com/the-fastest-method-to-eliminate-credit-card-debt?ref=seealso">The Fastest Method to Eliminate Credit Card Debt</a>)</p> <h2>6. Know the Difference Between a <em>Want</em> and a <em>Need</em></h2> <p>As I write this, there are throngs of advertisers plotting new ways to help consumers confuse wants and needs. It's big business. In reality, our needs are fairly straightforward (nourishing food, secure shelter, good healthcare, etc.).</p> <p>But what about that self-cleaning, solar-powered, lavender-infused kitty litter box that you can control with your smartphone? What sort of primitive existence would you be reduced to without this life-changing gadget?</p> <p>Let's face it: Being able to distinguish what we want from what we need is a prerequisite for making wise buying decisions. If you can't master this skill, your needs will be endless and your paycheck will never keep up. (See also: <a href="http://www.wisebread.com/25-products-you-think-you-need-but-really-don-t?ref=seealso">25 Products You Think You Need, But Really Don't</a>)</p> <p>Here's the curious thing: Today, when we talk about the rules of frugal living, aren't we really talking about basic financial literacy? It seems over the past couple of generations, common fiscal sense has been reframed as an extreme lifestyle. Maybe it's time to change the conversation about saving and managing money &mdash; and make frugal living a far more fundamental skill.</p> <p><em>Are you frugal-living pro? Which rules were the hardest for you to learn? Which have we missed?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/kentin-waits">Kentin Waits</a> of <a href="http://www.wisebread.com/the-only-6-rules-of-frugal-living-you-need-to-know">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/rich-people-spend-350k-to-park-their-cars-heres-how-wed-spend-it-instead">Rich People Spend $350K+ to Park Their Cars — Here&#039;s How We&#039;d Spend it Instead</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-smart-money-moves-to-make-before-the-holiday-season-begins">9 Smart Money Moves to Make Before the Holiday Season Begins</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-do-a-spending-fast-in-16-easy-steps">How to Do a Spending Fast in 16 (Easy!) Steps</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-personal-finance-skills-everyone-should-master">12 Personal Finance Skills Everyone Should Master</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-frugal-living-commencement-speech-id-give-to-my-younger-self">The Frugal Living Commencement Speech I&#039;d Give to My Younger Self</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Frugal Living debt investing lifestyle living below means money needs spending wants Fri, 08 Apr 2016 10:00:14 +0000 Kentin Waits 1683756 at http://www.wisebread.com Psychology of Money: How We Secretly Want People to Make Us Buy Things http://www.wisebread.com/psychology-of-money-how-we-secretly-want-people-to-make-us-buy-things <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/psychology-of-money-how-we-secretly-want-people-to-make-us-buy-things" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/megaphone-5305056-small.jpg" alt="megaphone" title="megaphone" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>&quot;I wish someone would give me a couple thousand dollars and tell me I had to spend it on X.&quot; Ever feel like that? Yeah, me too. (See also: <a href="http://www.wisebread.com/its-all-your-money">It's All Your Money</a>)</p> <p>I say that even though it goes against my most fundamental principle of financial management &mdash; which is that you figure out what you most want and then arrange your life so that you get those things. To wish for money that somebody would make me spend on something else? That seems very wrong.</p> <p>I first became aware of this phenomenon when I was a kid, and my dad said something like this. He was talking about living-room furniture. But whether it's furniture or something else, I think everybody sometimes feels this way.</p> <h2>Spending Goals, in Theory and Practice</h2> <p>In theory, I disagree. In theory, I say: If you want nice furniture, go ahead and budget for nice furniture. Make a plan, save your money, and then (when you're ready) go ahead and buy some nice furniture.</p> <p>In practice, of course, when you allocate enough money to cover your needs, and then you line up your wants... Well, there are some that you get right away, some that take a little while, and some that take a long while.</p> <p>It's for those last items &mdash; the ones that take a long while &mdash; that sometimes this feeling kicks in. It's not all of them. It tends not to be the really expensive ones. I've never heard anyone say, &quot;I wish someone would give me $50 million and tell me I had to spend it on a private jet.&quot; This feeling kicks in for the things that aren't so speculative. It's for the wants that are entirely affordable, if only they were just a bit higher in priority, but you can see will always &mdash; at least until you're rich &mdash; be behind a couple of other, higher-priority wants.</p> <h2>The Problem:&nbsp;Transient Wants</h2> <p>Although it may seem contrary, I think this feeling &mdash; the desire for someone else to take control of your finances and tell you how to spend a big chunk of money &mdash; supports my theory. It happens because not all wants are fixed. Some wants are transient.</p> <p>I call my theory the &quot;one big lump&quot; theory of your money, in contrast to the &quot;bunch of little lumps&quot; of money pre-allocated to specific goals. I say all of your money should pre-allocated to satisfying all your goals. (See also: <a href="http://www.wisebread.com/the-one-big-lump-theory-of-your-money">The &quot;One Big Lump&quot; Theory of Your Money</a>)</p> <p>When you do that, you're in a position to optimally manage your money. You can use retirement accounts and college savings for their tax savings. You can choose your investments based on the time-horizons of the various wants in your plan.</p> <p>That's harder when you start pre-allocating money for this or that want &mdash; and it becomes impossible when you start letting transient wants make a hash of your plan.</p> <p>It's those transient wants that make you wish someone else would direct your spending. When you look at your shabby furniture and wish you had something a little more fancy &mdash; and then look at your budget and see that it's going to be years before you get to buy new living room furniture. That's when you wish for someone to make you re-prioritize that item. And that, I think, is a good enough reason to go back to basics. (See also: <a href="http://www.wisebread.com/plan-for-your-wants">Plan for Your Wants</a>)</p> <p>You don't have to make a plan and stick to it. It is perfectly fine to adjust your plan as your desires change. If a transient want rears its head and says, &quot;Forget about the next six things you were planning to buy and buy me instead,&quot; it's perfectly fine to plug the new shiny thing in your plan right near the top.</p> <p>Maybe it won't stay there. Maybe a night's sleep and a bit of cogitation will make you realize that its old spot, six slots down down in your plan, was the right place.</p> <p>Maybe it will. Maybe the new shiny thing is what you should have had at the top all along.</p> <p>These cases though &mdash; the cases where you find yourself wishing someone would take charge and make you buy something &mdash; are much more likely to be in the former category. Because the whole reason you feel that way is that you're in the thrall of a transient want. It won't last. Pretty soon your true values will come to the fore, and you'll end up back on your old plan (or one a lot like it).</p> <p>And if they don't &mdash; if it turns out that this new plan really is in closer alignment with your true values &mdash; that's okay too. Because it's your plan.</p> <p>In my dad's case, he did eventually get new living room furniture, but not until after I'd gone off to college.</p> <p><em>How do you prioritize your wants? Do you have a plan for them or do you satisfy them as they appear?</em></p> <p>&nbsp;</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/philip-brewer">Philip Brewer</a> of <a href="http://www.wisebread.com/psychology-of-money-how-we-secretly-want-people-to-make-us-buy-things">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/plan-for-your-wants">Plan for your wants</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/a-budget-is-not-a-constraint">A Budget is Not a Constraint</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/your-budget-envelopes-or-a-plan">Your budget: envelopes or a plan?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-tips-from-playbook-for-tough-times-thatll-help-you-live-your-best-life">5 Tips From &quot;Playbook For Tough Times&quot; That&#039;ll Help You Live Your Best Life</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-dumb-ways-youre-going-to-waste-money-this-summer">9 Dumb Ways You&#039;re Going to Waste Money This Summer</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting budgeting planning wants Mon, 19 Aug 2013 10:24:30 +0000 Philip Brewer 981189 at http://www.wisebread.com 25 Products You Think You Need, but Really Don’t http://www.wisebread.com/25-products-you-think-you-need-but-really-don-t <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/25-products-you-think-you-need-but-really-don-t" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/4098652750_c217cc9e3b_z.jpg" alt="shopping cart" title="shopping cart" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>As someone who has worked in advertising for over 17 years, I can tell you that my industry is responsible for creating an awful lot of need. There are some things in life that we actually do need, like food, clothing, shelter, transportation, and so on.&nbsp;But even within those basic necessities, needs are created for things that do us no good. No one needs Adidas shoes over Nike shoes. No one needs a Big Mac. No one needs a Lexus. And no one needs a theater in their basement. These are wants, created by the ad industry to convince you that you will be unhappy if you don&rsquo;t have them. (See also: <a href="http://www.wisebread.com/what-you-need-vs-what-you-want-and-how-to-tell-the-difference">What You Need vs. What You Want, and How to Tell the Difference</a>)</p> <p>As George Carlin once said,&quot;Trying to be happy by accumulating possessions is like trying to satisfy hunger by taping <em>sandwiches</em> all over your body.&quot;</p> <p>So, in an effort to bring a little balance to the shopping world, I present a list of 25 things that advertisers, manufacturers, and retailers insist you need, but actually don&rsquo;t. And, for ease of browsing, I&rsquo;ve split it into categories. Let&rsquo;s start with the multi-billion dollar cosmetics industry.</p> <h2>Cosmetics</h2> <p>Where would the beauty industry be if not for its skill at manufacturing desire?</p> <p><strong>1. Aftershave</strong></p> <p>I shave once or twice a week. And when I do, I rarely splash on aftershave. The reason you are told you need it is to close your pores, but they&rsquo;ll do that on their own with a splash of cold water. Aftershave has one purpose, and that&rsquo;s to make you smell nice. If that&rsquo;s what you want, buy it for that. But you don&rsquo;t actually <em>need</em> it.</p> <p><strong>2. Body Scrub</strong></p> <p>Those fancy scrubs filled with crushed peach pits or other granules are not required at all. A simple washcloth or loofah will do the job just as well.</p> <p><strong>3. Leave-In Conditioners</strong></p> <p>They promise silky-soft hair, but in actuality they can coat the hair in fragrances and other ingredients that can build up over time, making your hair look and feel worse. And you&rsquo;ll buy more leave-in conditioner to combat it!</p> <p><strong>4. Cellulite Creams</strong></p> <p>It&rsquo;s snake oil. It&rsquo;s silly. It&rsquo;s nonsense. Nothing you can buy in a bottle or tub will get rid of cellulite for you, so don&rsquo;t go out and buy it. Seriously.</p> <p><strong>5. Toner</strong></p> <p>In the old days, soaps used to leave a nasty film on your face. They don&rsquo;t any more. So toners are a waste of time and money.</p> <p><strong>6. ChapStick</strong></p> <p>Any lip balm really. Did you know that lip balms contain alcohol? Guess what alcohol does to skin? Dries it. You&rsquo;ll be reapplying your lip balm all day to combat the effects of your lip balm. Lips, 99% of the time, are self moisturizing. So leave them alone.</p> <p><strong>7. Shower Gel</strong></p> <p>Crammed with petroleum by-products and chemicals, shower gel may smell nice but it isn&rsquo;t necessary. Keep it simple. Use a bar of decent soap and a washcloth. And if you're out of soap, water and a good scrub with your washcloth will do the job.</p> <h2>Sports and Fitness</h2> <p>We really do need to get fit and stay fit, but we don't need to spend a lot of money on athletic apparel and fitness supplies.</p> <p><strong>8. A Gym Membership</strong></p> <p><a href="http://www.wisebread.com/why-going-to-the-gym-is-a-waste-of-money-time-and-resources">You don't need a gym membership to get in shape</a>. Most people don&rsquo;t get anywhere near the use out of them that they should. If you&rsquo;re hell bent on getting fit, save yourself a lot of money and jog, take the stairs, do pushups and sit ups, and find other ways to stay in shape without the need for an expensive monthly fee.</p> <p><strong>9. &quot;Diet&quot; Meals</strong></p> <p>Those low calorie meals are quick and easy, but they are nutritionally lacking what you really need. The process involved in making them &mdash; freezing, defrosting, and so on &mdash; kills flavor and nutrients. Eat a healthy balanced diet and eat smaller portions.</p> <p><strong>10. Exercise Gadgets</strong></p> <p>Ab toners, butt lifters, and all those other fitness inventions prey on your wish to get fit quickly and easily. There&rsquo;s no such solution. They are gimmicks, they never do what you think they will, and you will sell them for a quarter of the price in a yard sale, or let them rot in the basement.</p> <p><strong>11. Fancy Athletic Clothing</strong></p> <p>You&rsquo;ll see people spending a fortune on wicking materials, silver-infused fabrics, breathable name brand clothing, and all sorts of other designer gear. All you need is a pair of sneakers that give good support, a cotton T-shirt, and a pair of socks and shorts. That&rsquo;s it.</p> <p><strong>12. Miracle Pills</strong></p> <p>Don&rsquo;t be fooled by fat burners and &quot;silver bullet&quot; remedies. With a balanced diet and exercise, and a lot of hard work, and you&rsquo;ll get the results you need. Pills just shrink your bank balance.</p> <h2>Baby Stuff</h2> <p>It's easy to fall prey to marketers' come-ons when children are involved.</p> <p><strong>13. Crib Bumpers and Bed Sets</strong></p> <p>They&rsquo;re pretty, cost a lot of money, and will never get used. <a href="http://www.cnn.com/2011/10/18/health/no-bumpers-cribs-sids-parenting/index.html">They&rsquo;re also unsafe</a> and shouldn&rsquo;t be in the crib. Don't bother.</p> <p><strong>14. Wipe Warmers</strong></p> <p>You can warm wipes in the palm of your hand for a few seconds if you want, but honestly, babies really don&rsquo;t need them.</p> <p><strong>15. A High Chair</strong></p> <p>These things are bulky and end up in the basement or garage. Buy a strap-in booster seat to use with your regular chairs. And when you don&rsquo;t need it, you can store it in the corner and still have full use of the dining set.</p> <p><strong>16. Baby Monitors</strong></p> <p>Unless you live in a Bill Gates style mansion or have a hearing issue, there&rsquo;s really no need to buy a baby monitor. As a parent of three, with one still under a year, I can tell you that whenever my youngest cries, my wife and I both hear it. Sure, we bought a monitor, like &quot;good parents&quot; do. But we don&rsquo;t use it any more. The interference was more annoying than anything else, and we have never, ever slept through our infant's crying. As these things can set you back several hundred dollars, you should really save your money.</p> <p><strong>17. Walkers</strong></p> <p>Think about this &mdash; we have been walking for centuries, and we didn&rsquo;t need walkers to assist us. Babies will pull up on furniture, your leg, anything they can find, and will figure out walking on their own. You can help, using your hands to guide them. Walkers are fun, but not necessary.</p> <p><strong>18. Changing Pad</strong></p> <p>At about $30, they&rsquo;re not that expensive, but you don&rsquo;t need one. A lot of moms I know create them using folded towels or blankets.</p> <h2>Household Items</h2> <p>Look around your house. There are lots of opportunities to reuse and repurpose instead of buying chore specific products.</p> <p><strong>19. Washing Machine Cleaners</strong></p> <p>First, they sell you the latest, greatest way to wash your clothes. Then you find out the new washer needs regular cleaning, too, with expensive packaged cleaners. Don&rsquo;t bother with them. Just add two cups of white vinegar into the drum and run a regular cycle.</p> <p><strong>20. Silver Jewelry Polish</strong></p> <p>Want to <a href="http://www.wisebread.com/how-to-clean-silver-naturally">brighten those valuables</a>? Mix a little toothpaste with baking soda, scrub with a toothbrush, then rinse with warm water and buff with a dry cloth.</p> <p><strong>21. Cord Organizers</strong></p> <p>As our lives get more cluttered with gadgets, they also become filled with cords and wires. Don&rsquo;t buy fancy cord organizers. A simple toilet paper tube will do the job. If you cover it in black tape, it won't look like a toilet paper tube, either.</p> <p><strong>22. Paint Remover for Hands and Skin</strong></p> <p>You&rsquo;ll see a lot of products offering great solutions to the painted hands problem. But it&rsquo;s not such a problem at all. A dab of olive oil will remove the stains just as well.</p> <p><strong>23. Hard Water Stain Remover</strong></p> <p>Products like CLR will do that job, but for a price. You can do it with products you already have at home. Combine a teaspoon of vinegar with two tablespoons of salt, and mix into a paste. Then, scrub it in, and watch those hard water stains disappear.</p> <p><strong>24. Drain Uncloggers</strong></p> <p>When you buy these, you really do pour good money down the drain. <a href="http://www.wisebread.com/10-really-easy-ways-to-unclog-drains">Baking soda is your friend here</a>&nbsp;&mdash; just pour a 1/2 cup down and watch it go to work. If it needs a little help, a wire coat hanger can help.</p> <p><strong>25. Dryer Sheets</strong></p> <p>A little dab of fabric softener on a hand towel will actually do the same job. The towel is reusable, and fabric softener is way cheaper than dryer sheets.</p> <p><em>Now, over to you. What have you discovered you can pass on, or substitute with something far cheaper?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/paul-michael">Paul Michael</a> of <a href="http://www.wisebread.com/25-products-you-think-you-need-but-really-don-t">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-personal-finance-skills-everyone-should-master">12 Personal Finance Skills Everyone Should Master</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-do-a-spending-fast-in-16-easy-steps">How to Do a Spending Fast in 16 (Easy!) Steps</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-invest-in-the-stock-market">Why invest in the stock market?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/treat-yourself-like-a-child-to-be-more-grown-up">Treat yourself like a child to be more grown up</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-many-reasons-to-make-do-with-less">The Many Reasons to Make Do with Less</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Shopping marketing needs wants Thu, 07 Feb 2013 11:36:34 +0000 Paul Michael 967534 at http://www.wisebread.com Best Money Tips: How to Stop Buying so Many "Wants" http://www.wisebread.com/best-money-tips-how-to-stop-buying-so-many-wants <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-how-to-stop-buying-so-many-wants" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/2780602446_7c116ca901_z.jpg" alt="How To Stop Buying So Many &quot;Wants&quot;" title="How To Stop Buying So Many &quot;Wants&quot;" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Welcome to Wise Bread's <a href="http://www.wisebread.com/topic/best-money-tips">Best Money Tips</a> Roundup! Today we found some awesome articles on how to stop buying so many &quot;wants,&quot; saving money and the planet, and correcting the wrong money lessons.</p> <h2>Top 5 Articles</h2> <p><a href="http://andthenwesaved.com/how-to-stop-buying-wants/">You Don't Need It! How To Stop Buying So Many &quot;Wants&quot;</a> &mdash; To avoid buying wants, only use cash when making purchases. [And Then We Saved]</p> <p><a href="http://genxfinance.com/shift-your-habit-to-save-money-and-the-planet/">Shift Your Habit to Save Money and the Planet</a> &mdash; Did you know shutting off your computer every night can save you $55 per year? [Generation X Finance]</p> <p><a href="http://www.thesimpledollar.com/2013/01/01/correcting-the-wrong-money-lessons/">Correcting the Wrong Money Lessons</a> &mdash; If you notice your child has learned a money lesson incorrectly, immediately explain to them why what they've learned is incorrect. [The Simple Dollar]</p> <p><a href="http://www.consumerismcommentary.com/plan-for-the-payroll-tax-cut-expiring-in-2013/">Plan for the Payroll Tax Cut Expiring in 2013</a> &mdash; Be prepared for the payroll tax cut that expires this year by reducing your spending by $100 per month. [Consumerism Commentary]</p> <p><a href="http://www.marcandangel.com/2013/01/02/9-surefire-ways-to-get-what-you-want/">9 Surefire Ways to Get What You Want</a> &mdash; Minding your thoughts and your words can help you get what you want. [Marc and Angel Hack Life]</p> <h2>Other Essential Reading</h2> <p><a href="http://lifehacker.com/5971473/how-to-tackle-three-of-the-toughest-interview-questions?tag=jobs">How to Tackle Three of the Toughest Interview Questions</a> &mdash; When asked about your work history, point out the things that stand out. [Lifehacker]</p> <p><a href="http://www.savvysugar.com/Essential-Tools-Cleaning-Supplies-Your-Home-26433953">9 Must-Have Household Items Every Savvy Woman Needs</a> &mdash; Every savvy woman should have baking soda in her home. [SavvySugar]</p> <p><a href="http://yesiamcheap.com/2013/01/making-music-for-less/">Making Music for Less</a> &mdash; When buying a new instrument, don't be afraid to bargain! [Yes, I Am Cheap]</p> <p><a href="http://parentingsquad.com/daydream-believer-7-tips-to-help-slow-things-down-in-2013">Daydream Believer: 7 Tips to Help Slow Things Down in 2013</a> &mdash; Slow things down in 2013 by planning to make no plans. [Parenting Squad]</p> <p><a href="http://www.freemoneyfinance.com/2013/01/2013-financial-resolutions.html">2013 Financial Resolutions</a> &mdash; Are any of these financial resolutions on your list of resolutions for 2013? [Free Money Finance]</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/ashley-jacobs">Ashley Jacobs</a> of <a href="http://www.wisebread.com/best-money-tips-how-to-stop-buying-so-many-wants">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/this-creative-shopping-strategy-could-save-you-tons">This Creative Shopping Strategy Could Save You Tons</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/25-products-you-think-you-need-but-really-don-t">25 Products You Think You Need, but Really Don’t</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-how-to-get-a-sale-price-match-at-16-popular-stores">Here&#039;s How to Get a Sale Price-Match at 16 Popular Stores</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/14-pricey-things-you-shouldnt-buy-and-what-to-get-instead">14 Pricey Things You Shouldn&#039;t Buy (And What to Get Instead)</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/47-simple-ways-to-waste-money">47 Simple Ways To Waste Money</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Shopping best money tips buying spending wants Thu, 03 Jan 2013 11:00:31 +0000 Ashley Jacobs 962931 at http://www.wisebread.com Ask the Readers: Is There Anything in Your Budget You Could Live Without? http://www.wisebread.com/ask-the-readers-is-there-anything-in-your-budget-you-could-live-without <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/ask-the-readers-is-there-anything-in-your-budget-you-could-live-without" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/1386286094_ceccacb1b6_z-1.jpg" alt="Is there Anything in Your Budget You Could Live Without?" title="Is there Anything in Your Budget You Could Live Without?" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p><em><span id="internal-source-marker_0.15750901958494">Editor's Note: Congratulations to <a href="http://www.wisebread.com/ask-the-readers-is-there-anything-in-your-budget-you-could-live-without#comment-543019">Rebecca B.A.R.</a>, <a href="http://www.wisebread.com/ask-the-readers-is-there-anything-in-your-budget-you-could-live-without#comment-542965">Happy Love</a>, and <a href="http://www.wisebread.com/ask-the-readers-is-there-anything-in-your-budget-you-could-live-without#comment-542950">Amy</a> for winning this week's contest!</span></em></p> <p>Almost everyone knows the difference between needs and wants. Needs are things you absolutely must have in order to get by while wants are more luxury items you might not need. Everyone knows one of the best ways to save money is to reduce spending money on wants. But when it comes down to it, what wants would you really be able to let go of if you needed to make cutbacks?</p> <p><b>Is there anything in your budget you could live without?</b><span style="font-weight:normal">&nbsp;Cable? Coffee? Dining out? Facials? Pedicures? Or...?</span></p> <p>Tell us if there is anything in your budget you could live without and we'll enter you in a drawing to win a $20 Amazon Gift Card!</p> <h2>Win 1 of 3 $20 Amazon Gift Cards</h2> <p>We're doing three giveaways &mdash; one for random comments, one for random Facebook &quot;Likes&quot;, and another one for random tweets.</p> <h3>Mandatory Entry:&nbsp;</h3> <ul> <li>Post your answer in the comments below&nbsp;</li> </ul> <h3>For extra entries (1 per action):</h3> <ul> <li>Go to our <a href="http://www.facebook.com/pages/Wise-Bread/26830741467?ref=ts">Facebook page</a>, &quot;Like&quot; us, and leave a comment on this article telling us you did, or</li> <li><a href="http://www.twitter.com/">Tweet</a> your answer. You have to be a follower of our <a href="http://twitter.com/wisebread">@wisebread account</a>. Include both &quot;@wisebread&quot; and &quot;#WBAsk&quot; in your tweet so we'll see it and count it. Leave a link to your tweet (click the timestamp for the individual URL) in a separate comment.</li> </ul> <p><strong>If you're inspired to write a whole blog post OR you have a photo on flickr to share, please link to it in the comments or tweet it.</strong></p> <h4>Giveaway Rules:</h4> <ul> <li>Contest ends Monday, August 13th at 11:59 pm Pacific. Winners will be announced after August 13th on the original post. Winners will also be contacted via email.</li> <li>You can enter all three drawings &mdash; once by leaving a comment, once by liking our Facebook update, and once by tweeting.</li> <li>This promotion is in no way sponsored, endorsed or administered, or associated with Facebook.</li> <li>You must be 18 and US resident to enter. Void where prohibited.</li> </ul> <p><strong>Good Luck!</strong></p> <div class="field field-type-text field-field-blog-teaser"> <div class="field-items"> <div class="field-item odd"> Tell us if there is anything in your budget you could live without and we&#039;ll enter you in a drawing to win a $20 Amazon Gift Card! </div> </div> </div> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/ashley-jacobs">Ashley Jacobs</a> of <a href="http://www.wisebread.com/ask-the-readers-is-there-anything-in-your-budget-you-could-live-without">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/ask-the-readers-whats-the-biggest-item-in-your-budget">Ask the Readers: What&#039;s the Biggest Item in Your Budget?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/ask-the-readers-hope-in-a-new-year-chance-to-win-10">Ask the Readers: Hope in a New Year? (Chance to Win $10)</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/ask-the-readers-name-your-favorite-moment-of-2010">Ask the Readers: Name Your Favorite Moment of 2010</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/ask-the-readers-do-gift-cards-make-a-good-gift">Ask the Readers: Do Gift Cards Make a Good Gift?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-personal-finance-skills-everyone-should-master">12 Personal Finance Skills Everyone Should Master</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Giveaways Ask the Readers budget needs wants Tue, 07 Aug 2012 10:36:42 +0000 Ashley Jacobs 941369 at http://www.wisebread.com How to Do a Spending Fast in 16 (Easy!) Steps http://www.wisebread.com/how-to-do-a-spending-fast-in-16-easy-steps <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-do-a-spending-fast-in-16-easy-steps" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/5209988804_157d4c108c_z.jpg" alt="woman hiding her face" title="woman hiding her face" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>A spending fast (also known as a spending freeze or a spending lock-down) is a method of getting out of debt through the elimination of all &quot;non-need&quot; spending.</p> <p>By doing a spending fast, I was able to substantially improve my financial life by paying off $23,605.10 in debt in a matter of 15 months! Now I am able to live a debt-free and autonomous life, one where my goals take priority and the debt doesn't. (See also: <a href="http://www.wisebread.com/how-to-not-be-a-debt-slave">How to Not Be a Debt Slave</a>)</p> <p>Before deciding to do a spending fast there are a few factors to consider; these are all elements that will affect how quickly you are able to become debt-free.</p> <p><strong>Factors That Will Affect Your Spending Fast</strong></p> <ul> <li>The total amount of debt you have</li> <li>Your income</li> <li>How much spending you decide to cut out</li> <li>The duration of time you chose for your spending fast&nbsp;</li> <li>How much money you can make by selling your unused possessions</li> <li>What you chose to do to generate additional income&nbsp;</li> </ul> <p>My life completely changed when I finally decided that I <em>had</em> to be done with my debt. The cycle of debt and remorse needed to end once and for all. Life is better on this side &mdash; the debt-free side. So, if you want to get out of debt and change your life by doing a spending fast, this is how it's done.</p> <h3>1. List Your Debts and Their Interest Rates</h3> <p>Make a list of all your bills. Write the highest-interest rate bill at the top of the list and the lowest interest rate bill at the bottom of the list. This will determine the order in which you will eliminate each bill.</p> <h3>2. Ask Your Creditors for Lower Interest Rates</h3> <p>Some credit card companies will actually lower your interest rate, so it's worth a shot to call them and ask.</p> <h3>3. Picture the Life You Dream of Living</h3> <p>Determine your priorities by putting actual pen to paper and by writing down your ideal life. What would you be doing if you didn't have to work for a living? How would you spend your time, and when are you the most happy?</p> <h3>4. Ask Yourself, &quot;Is There Any Way That I Can Reach My Goals With the Debt I Have?&quot;</h3> <p>If the answer is &quot;no&quot; and you don't feel good about it, then it's time to start thinking about making some serious life changes. If you find yourself making decisions about things to do (or not do) things based on how much debt you owe, be very honest with yourself. Does your debt prevent you from living a life that is true to you? Does your debt (and your obligation to it) pull you and angle your decisions in even the subtlest ways?</p> <h3>5. Decide to Be Done With Debt Once and for All</h3> <p>If you're not ready to be done with your debt, then you might want to try some other methods first. The spending fast technique requires commitment and dedication. A spending fast&nbsp;is a way to get extreme results in a relatively short amount of time, but you have to be ready to go forward full-force with it.&nbsp;</p> <h3>6. If You're Partnered, Try to Get Them to Do the Spending Fast With You</h3> <p>It's a lot easier to change your life if your partner is on board but, if they aren't, then consider doing the spending fast solo (separate bank accounts are very helpful here).&nbsp;</p> <h3>7. Set a Time-Frame for Your Spending Fast</h3> <p>I recommend a year, so you can get past the difficult beginning part (where all your habits are getting changed) and into the real benefits part (where your debt is getting paid off).</p> <h3>8. Make a Public Declaration of Your Desire to Become Debt-Free</h3> <p>Tell your friends and family about your decision to do a spending fast so you can have the accountability that comes along with it. In addition to telling your family and friends, you can take a <a href="http://www.andthenshesaved.com/get-out-of-debt-pledge/">Debt-Free Life Pledge</a>&nbsp;on my spending-fast site.</p> <h3>9. Create a &quot;Wants and Needs&quot; List</h3> <p>The &quot;wants and needs&quot; list will serve as the backbone of your spending fast. On the &quot;needs&quot; list include the bare necessities needed to live: rent, food, utilities, etc. On the &quot;wants&quot; list, put everything that is an &quot;extra&quot; in your life. Things that went on this side of the list for me were items like clothes, coffee at coffee shops, movies in the theater, gifts, bed linens, new music, new make-up, shoes, etc. (Here is my original <a href="http://www.andthenshesaved.com/spendingfastguidelines/">spending fast wants and needs list</a>&nbsp;if you're interested in seeing it.)&nbsp;The &quot;wants and needs&quot; list can (and will) be different based on each person's varying priorities in life.</p> <h3>10. Spend Money on the &quot;Needs&quot; Side of the List Only</h3> <p>This is the simple-but-not-easy part of the spending fast.</p> <h3>11. Think About What You <em>Can</em> Buy Rather Than What You Can't</h3> <p>If find yourself starting to feel bummed out when you're in the thick of the spending fast, try to shift your perspective, because it will do wonders for your morale. Remember to <a href="http://www.wisebread.com/47-cheap-fun-things-to-do-this-weekend">keep having fun</a> (just the free kind). Remember that the spending fast isn't forever. There is a light at the end of the tunnel (that's why you set a time-frame at the start), and remind yourself of why you're doing the spending fast in the first place &mdash; it's to get out of debt once-and-for-all and to change your life!</p> <h3>12. Become Immersed in a Community of Like-Minded People</h3> <p>On my spending-fast website, <a href="http://www.andthenshesaved.com/">And Then She Saved</a>, I've started a <a href="http://www.andthenshesaved.com/community">community page</a>&nbsp;where people share their questions, struggles, accomplishments, set-backs, tips, tricks, and most importantly, their getting-out-of-debt successes. It's a great place to get a reminder that we aren't alone in our dreams to live debt-free lives.</p> <h3>13. Attack Your Debts</h3> <p>At the end of the month, send all the money that is left in your account to the bill that has the highest interest rate. Continue to send the minimum due on your other bills. Once a bill gets knocked out, be proud of yourself! You're really doing it! Then, attack the next highest interest rate bill on the list. Become competitive with yourself; try to get better numbers than the previous month and&nbsp;keep track of your savings from month-to-month. To be able to see all of the savings at the end of the year is amazing.</p> <h3>14. Be Committed to the Process</h3> <p>It's unrealistic to think that &quot;mistakes&quot; won't happen so keep going even when they (inevitably) occur.&nbsp;</p> <h3>15. Continue With the Spending Fast Until You Reach Your End Date</h3> <p>Stick with the spending fast for the entire time-frame you committed yourself to. If you reach your goal of paying off your debt and you happen to do it before your predetermined end date (um, awesome!), then why not keep going? Squirrel away the extra money and prepare yourself for the next step &mdash; financial security.</p> <h3>16. Be Proud of Yourself for What You Accomplished &mdash; Big or Small&nbsp;</h3> <p>When you come to the end of your spending fast, look back on all you were able to do. Being proactive and being willing to take charge of your life and finances is definitely something to be proud of!</p> <p>Throughout the spending fast, always be on the look-out for ways to cut the &quot;needs&quot; list down even more, get creative with <a href="http://www.wisebread.com/37-savings-changes-you-can-make-today">ways to save money</a>, and be willing to make things yourself in an effort to save.</p> <p>Before you know it, saving will become (unbelievably) more fun than spending and your financial life will be forever changed.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/anna-newell-jones">Anna Newell Jones</a> of <a href="http://www.wisebread.com/how-to-do-a-spending-fast-in-16-easy-steps">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-personal-finance-skills-everyone-should-master">12 Personal Finance Skills Everyone Should Master</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-only-6-rules-of-frugal-living-you-need-to-know">The Only 6 Rules of Frugal Living You Need to Know</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-many-reasons-to-make-do-with-less">The Many Reasons to Make Do with Less</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/if-budgeting-isnt-fun-youre-doing-it-wrong">If Budgeting Isn&#039;t Fun, You&#039;re Doing It Wrong</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/treat-yourself-like-a-child-to-be-more-grown-up">Treat yourself like a child to be more grown up</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Frugal Living Debt Management get out of debt needs spending freeze wants Fri, 04 May 2012 10:36:07 +0000 Anna Newell Jones 926140 at http://www.wisebread.com If Budgeting Isn't Fun, You're Doing It Wrong http://www.wisebread.com/if-budgeting-isnt-fun-youre-doing-it-wrong <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/if-budgeting-isnt-fun-youre-doing-it-wrong" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/notebook-budget-pen_2.jpg" alt="Notebook and pen with a draft budget" title="Notebook with a draft budget" class="imagecache imagecache-250w" width="250" height="163" /></a> </div> </div> </div> <p>Make a list of your favorite things to do. Start with your most favorite thing to do, then your next most favorite, and keep going until you get to budgeting. Go ahead; I'll wait.</p> <p>If you haven't gotten down to budgeting yet, that's okay. There's a reason that most people don't enjoy budgeting, which I'll get to in a minute. But first, I want to talk about how you're doing it wrong.</p> <h2>The wrong way to budget</h2> <p>What do you want? In particular, <strong>what do you most want to have</strong> and <strong>what do you most want to do</strong>?</p> <p>You probably had a bunch of ideas pop into your head. If you've got a minute, go ahead and note them down on the same piece of paper where you were making your list of favorite things to do.</p> <p>Now spend just a few seconds thinking about a budget.</p> <p>You probably had a short list of &quot;budget categories&quot; pop into your head: Housing, groceries, utilities, transportation, etc.</p> <p>So, what's the overlap between those two lists: the things you most want and those classic budget categories? Pretty small, I bet.</p> <p>See what I mean? You're doing it wrong.</p> <p>Those classic budget categories almost certainly belong on the list of things you really, really want. (Very few people want to be homeless and starving.) You just don't think to put them on the list because you're used having them.</p> <h2>Budgeting the fun way</h2> <p>Think again about what you really, really want &mdash; and this time don't forget to include the stuff that you're used to having, like food to eat and a place to sleep. Make a list. Put it into priority order, with water, food, and shelter at the top. Include electricity (very handy) and maybe your phone bill (if you want keep in touch with friends and family).</p> <p>But don't stop there. Go ahead and add to the list all those other things you want &mdash; the new car, the new computer, the vacation in Fiji, the smart phone, the complete works of L.L. Zamenhof. Rank them in with everything else. If you want those awesome new shoes more than you want clean laundry, go ahead and put the shoes above laundry on your list.</p> <p>Am I that weird for finding it fun to fantasize about all the cool stuff I want to have and do? Does putting the stuff in a big list make it any less fun? Granted, it would be even more fun to actually have and do them. Happily, that's the next step! Go ahead and treat yourself to the items that are at the top of your list!</p> <p>Yes, at first, that may just mean &quot;Pay your rent and utility bills,&quot; but that's not the end of things. The real reason that budgeting is fun is that it's the best way to get further down your list &mdash; to get past the things you need and start getting yourself the things you just want.</p> <h2>Still hate it?</h2> <p>As I said at the top, there's a reason that most people hate budgeting. It's because their finances are out of control. <em>If your finances are out of control, making a list like this feels doesn't feel like a step toward satisfying your wants: It feels like putting your nose up against the window of a shop with everything you want but can't afford.</em></p> <p>The solution to that is straightforward, if not exactly simple: Take control of your finances.</p> <p>The tool for doing so is right there in front of you. Take the list of items that you really, really want and <strong>put numbers on it</strong> &mdash; the cost of each item.</p> <p>All it takes to be in control of your finances is:</p> <ol> <li>Know what you want</li> <li>Know how much those things cost</li> <li>Buy things in order, starting with the most wanted</li> <li>Quit buying stuff before you spend all your money</li> </ol> <p>Once you're managing those steps routinely &mdash; and banking the surplus cash that comes from not spending all your money &mdash; you can start <a href="http://www.wisebread.com/plan-for-your-wants ">planning ways to get those items</a> that fall below the cutoff.</p> <p>You're probably not going to get the list exactly right on your first try. If all your friends are heading off to see the new 3D movie, joining them is going to seem like a huge want &mdash; maybe higher on the list than, let's say, eating lunch out. But after you've bought the ticket and watched the movie &mdash; when you're trying to choose between leftovers and a peanut butter sandwich for your brown-bag lunch &mdash; maybe you'd rank the movie a bit further down on the list. That's okay. Nobody gets their budget right on the first try. Take your time. Shuffle things up and down on the list. Pretty soon they'll settle down.</p> <p>That's when it starts getting fun.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/philip-brewer">Philip Brewer</a> of <a href="http://www.wisebread.com/if-budgeting-isnt-fun-youre-doing-it-wrong">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-do-a-spending-fast-in-16-easy-steps">How to Do a Spending Fast in 16 (Easy!) Steps</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-tips-for-improving-or-starting-a-budget">8 Tips for Improving or Starting a Budget</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-most-valuable-thing-debt-takes-from-you-isnt-money-its-this">The Most Valuable Thing Debt Takes From You Isn&#039;t Money — It&#039;s This</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-invest-in-the-stock-market">Why invest in the stock market?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/when-its-time-to-destroy-debt-start-with-a-goal">When It&#039;s Time to Destroy Debt, Start With a Goal</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Debt Management needs wants Tue, 13 Apr 2010 13:00:02 +0000 Philip Brewer 12328 at http://www.wisebread.com The Many Reasons to Make Do with Less http://www.wisebread.com/the-many-reasons-to-make-do-with-less <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-many-reasons-to-make-do-with-less" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/suspension-bridge.jpg" alt="Suspension bridge" title="Suspension bridge" class="imagecache imagecache-250w" width="250" height="180" /></a> </div> </div> </div> <p>Why would someone choose to have less than they could? Lots of reasons. There are as many ways to live large as there are people who refuse to think small. Over the time I've been writing for Wise Bread, I've expanded my list of reasons by quite a bit.</p> <p>One thing that I liked about Wise Bread right from the start is that it's about living large, and very much not about depriving yourself. The connection isn't always obvious, though, so I thought I'd run down my list. Making do with less helps you live large by letting you:</p> <p>1) <strong>Focus on what's important (by putting less resources into stuff that matters less)</strong>. This is at the core of how I've chosen to live my life. I have less of what I don't much care about so that I can have more of what I really want. Because my needs are really quite modest, I'm able to do exactly what I want with my life (be a full-time writer) without having to deprive myself. Like most people, there are a lot of things I want--but there isn't much that I want more than living the life I've chosen.</p> <p>2) <strong>Focus on what's important (because the other stuff is a distraction)</strong>. This resonates for me, too. Everything I buy is not only another thing I have to pay for--it's also another thing I have to find a place for, put away and get out again, use enough to justify the purchase, insure, keep clean and in good repair, worry about getting lost or stolen or broken, and then eventually dispose of.</p> <p>3) <strong>Learn the truth about yourself</strong>. Some time back I talked about <a href="http://www.wisebread.com/finding-joy-in-temporary-frugality">finding joy in temporary frugality</a>. I compared it to a backpacking trip. Partially it's a means to an end: The less you carry, the further you can go and the longer you can stay. But it's also educational. Some of the things you thought you needed turn out not to be as important as you'd imagined. Giving things up temporarily is occasionally a step toward realizing that you're happier without them.</p> <p>4) <strong>Live more gently on the planet</strong>. You've no doubt seen a dozen carbon-footprint calculators. Some people try to use less and waste less simply because they don't want to take more than their share. This resonates with me as well.</p> <p>5) <strong>Obey the commandments of your faith</strong>. Many religions make rituals out of having less in the form of fasting and charity. There are a lot of reasons for this. It can change your perspective on what's important, strengthen bonds within the community, and serve as a form of solidarity with others who have less.</p> <p>I'd like to finish with one reason that's not on the list: To have more later. It's not on the list because, although it does sort of work, this particular motivation often seems to lead to crazy-stupid behavior. It's true that, if you spend your twenties, thirties and forties scrimping and saving, you can probably spend your fifties, sixties, and seventies doing whatever you want--but that makes no sense. Much better, I think, to spend your youth doing whatever you want, constrained only to the extent that you're not committing your future along with your present--i.e. don't run up debts that you'll be paying for years.</p> <p>It makes good sense to spend less than you earn and save money--it adds to your freedom in the same way that going into debt reduces your freedom. It also makes sense to have a gradually rising standard of living--it's the natural order of things if for no other reason than that as you accumulate durable items they go on improving your life and as your skills grow your value as a worker increases. But to go beyond that--to live in voluntary penury now with the idea that you'll be able to live high on the hog when you're old--is weird, and in my experience doesn't lead to a good end.</p> <p>There are lots of other reasons to choose to spend less, own less, and use less as ways to live large, even without this one.<br /> &nbsp;</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/philip-brewer">Philip Brewer</a> of <a href="http://www.wisebread.com/the-many-reasons-to-make-do-with-less">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-personal-finance-skills-everyone-should-master">12 Personal Finance Skills Everyone Should Master</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-do-a-spending-fast-in-16-easy-steps">How to Do a Spending Fast in 16 (Easy!) Steps</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/sleeping-in-airports-for-the-stranded-and-frugal-minded">Sleeping In Airports For The Stranded And Frugal Minded</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-line-between-frugal-and-crazy">The line between frugal and crazy</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-only-6-rules-of-frugal-living-you-need-to-know">The Only 6 Rules of Frugal Living You Need to Know</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Frugal Living faith frugal frugality needs values wants Tue, 18 Aug 2009 13:00:05 +0000 Philip Brewer 3507 at http://www.wisebread.com Needs, wants, and not even wants http://www.wisebread.com/needs-wants-and-not-even-wants <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/needs-wants-and-not-even-wants" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/desertcanyon-3.jpg" alt="Desert canyon" title="Desert Canyon" class="imagecache imagecache-250w" width="250" height="188" /></a> </div> </div> </div> <p>Hang around with frugality and simplicity types for any length of time and you'll hear a lot about distinguishing between needs and wants. It's come to me, though, that this issue is less interesting than the much more important issue of distinguishing between your wants and those brief, transitory fancies that don't even rise to the level of being true wants.</p> <p>It's easy to see the &quot;not even&quot; wants after the fact: They're the things that you buy, play with for a day or a week, and then set aside to add to your clutter. For some people they're electronic gadgets. For other people they're toys or shoes or clothes or sports equipment.</p> <p>Personally, I find it easy to do this with tools of a creative nature--painting and drawing supplies, musical instruments, and so on. It usually happens like this:</p> <p class="rteindent1">I see a work of art that speaks to me; one where I'm impressed not by the virtuosity of the artist's skill but by the way the image captures something in my own experience. When that happens, it occurs to me that I could do my own drawing or painting of a similar subject or on a similar theme. If I followed up by doing some drawing or painting, all would be well. But too often I follow up by buying some paint or ink or paper: stuff I not only didn't need, but that I&nbsp;really didn't even want.</p> <p>For other people it happens different ways. They buy something because a coworker got one, or because friend praised the thing, or because a mentor told them they needed one, or because a new boyfriend was shocked to hear that they didn't already have one, or because an ex-girlfriend mentioned how cool the thing was, or because a child threw a tantrum, or because a spouse gazed wistfully at one.</p> <p>The whole purpose of advertising is to produce this reaction: To turn something you don't need (or even really want) into something that have to have--for long enough to get you to make the buy.</p> <p>I don't have much new to say about resisting your &quot;not even&quot; wants. You've heard a hundred times about waiting a few days and seeing if you still want it.</p> <p>The classic simplicity book <a href="http://www.amazon.com/gp/product/0143115766?ie=UTF8&amp;tag=wisbre08-20&amp;linkCode=as2&amp;camp=1789&amp;creative=390957&amp;creativeASIN=0143115766"><em>Your Money or Your Life</em></a> suggests translating all prices into &quot;life energy&quot;--the number of hours you have to work to earn the money to buy the thing. (Be sure to include the extra hours you work to pay the taxes and a share of the hours you spend commuting and the hours you work to buy the work clothes and the hours you spend shopping for work clothes...) If it's worth that, then by all means buy it.</p> <p>What's worked best for me is to spend some time looking at the things I already own and thinking about why this new thing might be more like the well-worn precious things I use all the time and less like the barely used, never used, no-longer used things that clutter up my apartment.</p> <p>In fact, it's worth doing that now and then even when you're not thinking about buying something new. After all, setting aside gifts, everything you own is something that you managed to convince yourself, at least for a moment, was something that you wanted. Go through that stuff. Even if all you can think is &quot;What was I thinking?&quot; there's a small education in that. Sometimes, though, you can think, &quot;Wow! That's so cool!&quot; and get it out and use it.</p> <p>I think I'll go through my art supplies tomorrow, and maybe make some art.<br /> &nbsp;</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/philip-brewer">Philip Brewer</a> of <a href="http://www.wisebread.com/needs-wants-and-not-even-wants">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/could-you-save-money-by-subscribing-to-an-addictive-game">Could you save money by subscribing to an addictive game?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/free-and-cheap-things-to-do-in-champaign-urbana">Free and cheap things to do in Champaign-Urbana</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-invest-in-the-stock-market">Why invest in the stock market?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/budgeting-for-your-next-vacation-yaycations">Budgeting for Your Next Vacation: Yaycations</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/wisdom-from-my-favorite-frugal-tv-character-julius-rock">Wisdom from My Favorite Frugal TV Character - Julius Rock</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Lifestyle Art and Leisure needs wants Tue, 10 Feb 2009 21:09:44 +0000 Philip Brewer 2828 at http://www.wisebread.com Why invest in the stock market? http://www.wisebread.com/why-invest-in-the-stock-market <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/why-invest-in-the-stock-market" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/nyse_1.jpg" alt="New York Stock Exchange" title="New York Stock Exchange" class="imagecache imagecache-250w" width="250" height="235" /></a> </div> </div> </div> <p>The conventional reason for investing in the stock market--perhaps offered with a bit less confidence now that we're in the midst of a stock market crash--is, &quot;It offers higher returns.&quot;&nbsp; But that gets us ahead of ourselves.&nbsp; We can learn a lot by taking a couple of steps back and looking first at our financial goals.</p> <p>Most people have a long list of financial goals, starting with things like paying the rent, putting food on the table, keeping the lights turned on, and so on.&nbsp; Work your way down the list and you get to things like replacing the old car, buying a house, putting the kids through college, and (sooner or later) retiring.</p> <p>Most people's wants, if you list them all out like that, will exceed their expected lifetime earnings (even before including the Ferrari, apartment in Paris, yacht, and private jet).&nbsp; And <strong>that's</strong> why people so automatically shoot for investments that offer the maximum returns--outsized returns are their only hope of satisfying all their wants.</p> <p>That thinking, though, leads people to make all sorts of poor choices.</p> <p>As a thought experiment, imagine someone whose wants could be comfortably satisfied by his or her income.&nbsp; (Since wants tend to expand without limit, I admit this is a bit tricky, but give it a try.)&nbsp;&nbsp; Such a person wouldn't need to invest at all (beyond establishing an emergency fund).&nbsp; In fact, investments would only make sense in the context of some particular goal--leaving a legacy for example.</p> <p>I'd like to suggest that this is really true of everyone.&nbsp; You just lead yourself astray if you line up all your wants on one side, and then create an aggressive portfolio on the other, hoping for some big wins to bridge the gap between your income and all the stuff you want.</p> <p>Note that I'm <strong>not</strong> suggesting that you <a href="http://www.wisebread.com/the-one-big-lump-theory-of-your-money">target particular investments to specific goals</a>--that's definitely the wrong approach.&nbsp; Your entire investment portfolio supports all your goals.&nbsp; Rather, the defect is in letting your wants grow without bound, putting you in a situation where the sum of your income and the return to ordinary saving still doesn't add up to enough to satisfy them.</p> <p>Now, it's fine to have some out-of-reach desires.&nbsp; (For example, I'd like to have a private rail car, which although much cheaper than a private jet, is still likely to be forever beyond my means.)&nbsp; The problem is letting them get out of control in a way that distorts your entire investment strategy.</p> <p>My suggestion is that you classify your wants into the important ones and the unimportant ones--and that the portion of your portfolio that's going to fund the important ones needs to be conservatively invested.</p> <p>Lots of people have made the point that the stock market is no place for money that you expect to need in the next 5 years.&nbsp; The events of the past year suggest that maybe an even longer period is in order.&nbsp; If you're prepared to delay your retirement by 5 or 10 years in order to have a shot at retiring 5 or 10 years early, then an aggressive investment strategy may be in order.&nbsp; The same sort of thinking is probably not appropriate for your college savings or the down payment on a new car.</p> <p>Here are some thoughts on some specific categories of investments:</p> <ul> <li><strong>Cash</strong> isn't much of an investment--but it's what you actually need when you're ready to spend.&nbsp; Your emergency fund should be in cash (money market fund, high-rate savings account, t-bills, etc.).</li> <li><strong>Short-term bonds</strong> rarely yield much more than cash--but they're a good choice for money that you're going to need at some particular time in the near future.&nbsp; (For example, as your kid approaches high school, it might make sense to start moving his college savings into short-term bonds with maturity dates that match the tuition bills.)</li> <li><strong>Long-term bonds</strong> are very vulnerable to inflation, but can be a great investment when the coupon is high enough to provide a good return over whatever inflation turns out to be.</li> <li><strong>Inflation-adjusted bonds</strong> are an excellent investment, except when the after-inflation return is very low--which it had been for the past several years.&nbsp; Happily, the return on <a href="/tips-and-i-bonds">TIPS</a> has surged in just the past few weeks, making these an investment well worth considering.&nbsp; (They are vulnerable in a deflation, which is probably why the return has shot up.)</li> <li><strong>Gold</strong> is a store of value.&nbsp; There's good reason to hope that your investment in gold will maintain its value, but little reason to hope that it will grow in value.&nbsp; (Although the gold price will go up if there's inflation--and just staying even with inflation can be tough with other investments.&nbsp; Still, don't expect a return from gold that will fund any of those wants on your list.)</li> <li><strong>Stocks</strong> are the classic investment.&nbsp; Prices are down right now, but the looming recession will probably mean that profits will be low as well.&nbsp; If you've got a 10-year time horizon, stocks are a good choice.</li> <li><strong>Real estate</strong> is another classic investment, but be careful not to delude yourself.&nbsp; As an investment, your home is worth whatever it lets you avoid paying in rent.&nbsp; Properties that you rent out are definitely investments--but being a landlord is as much like having a second job as it is like owning an investment like stocks or bonds.</li> </ul> <p>To answer the question I started with, the reason to invest in stocks to earn a higher return is that it lets you <em>satisfy wants that you couldn't otherwise afford.</em>&nbsp; But those higher returns come with higher risks--risks that mean that maybe those wants won't be satisfied at all.</p> <p>As recent events have made clear, the average return for the stock market may be higher than the average return of most other investments--but that doesn't mean that you can plug the average return into your plans and have any expectation that you'll get that return in any particular year.&nbsp; Even if you have a long time horizon, stocks may be down right when you're ready to spend the money.</p> <p>I guess you don't need me to tell you that. </p> <p>Do some thinking about your wants.&nbsp; A shot at high returns in the stock market makes good sense for funding some of your wants--especially the less important ones (the sports car) and the longer-term ones (early retirement).&nbsp;&nbsp; But for the important ones, and the ones with shorter time horizons--arrange to cover those without relying on outsized investment returns. &nbsp;</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/philip-brewer">Philip Brewer</a> of <a href="http://www.wisebread.com/why-invest-in-the-stock-market">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-ways-to-prepare-for-a-stock-market-dive">8 Ways to Prepare for a Stock Market Dive</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-investments-that-usually-soar-during-the-summer">7 Investments That Usually Soar During the Summer</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-foolproof-ways-to-protect-your-money-from-inflation">4 Foolproof Ways to Protect Your Money From Inflation</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-ways-to-invest-50-500-or-5000">The Best Ways to Invest $50, $500, or $5000</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-most-important-thing-youre-probably-not-doing-with-your-portfolio">The Most Important Thing You&#039;re Probably Not Doing With Your Portfolio</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment bonds gold mmf money market funds needs real estate stocks wants Mon, 27 Oct 2008 12:24:01 +0000 Philip Brewer 2547 at http://www.wisebread.com Treat yourself like a child to be more grown up http://www.wisebread.com/treat-yourself-like-a-child-to-be-more-grown-up <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/treat-yourself-like-a-child-to-be-more-grown-up" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/parent-and-child.jpg" alt="Parent and child" title="Parent and Child" class="imagecache imagecache-250w" width="250" height="181" /></a> </div> </div> </div> <p>This post is about repurposing a trick that grown-ups use to manage a child&#39;s wants.  You know the one.  It starts with pointing at a substitute.  Then, the grown-up frames one of two questions, such that the answer is always &quot;you don&#39;t need one.&quot;</p> <p>Whatever the child wants--let&#39;s call it X--the adult can always ask one of two questions:</p> <ol> <li>You&#39;ve got a perfectly good X--you use it all the time!  Why should I buy you a new one?</li> <li>You never use the X you&#39;ve got!  Why do you need a new one?</li> </ol> <p>Now, I&#39;m going to say in a minute that this is a useful way to think about things, but before I do, I want to acknowledge that grown-ups often use this structure to play what amounts to a cruel trick.  Until the child learns the structure, there&#39;s the implication that the child could get his or her wants fulfilled by switching--abandoning use of something needs to be replaced in the one case, or going through the motions of using something that&#39;s not really useable in the other.  This, of course, is a futile maneuver, because the adult then merely switches to the alternate question.</p> <p>Still, the underlying logic is entirely valid.  For pretty much anything you&#39;ve got, you&#39;re either using it--which proves that you&#39;ve got one that works and therefore don&#39;t need another, or else you&#39;re <strong>not</strong> using it--which proves that you <strong>certainly</strong> don&#39;t need another one.</p> <p>I&#39;ve had good luck in using this trick to manage my own wants.  And, since I&#39;m a grown-up, I can do it without being obliged to go on and turn it into a cruel trick.</p> <p>There&#39;s all kinds of stuff I want.  But, when I think of some new thing that I&#39;d like to get, I can say to myself, &quot;You don&#39;t need an iPhone--you&#39;ve got a perfectly good cell phone.&quot;  I can then let my inner child and inner adult argue for a while, with the child explaining that my old cell phone has crappy internet features and the adult pointing out that I spend plenty of time accessing the internet on my computer, so why would I need to access it on my phone as well?</p> <p>As the argument rages on, I can pay attention to either (or both!) sides of the adult&#39;s trick questions:  If I&#39;ve got a perfectly good one that I use all the time, why do I need a new one?  If I&#39;ve got one that I hardly ever use, why do I think getting a new one would make me any better off?</p> <p>Since I&#39;m in charge of my own spending, I&#39;m in a position to let myself be convinced by my arguments.  After all, there are sometimes good answers, even though they don&#39;t work for children.  Some things that I use all the time need to be replaced because they&#39;ve worn out.  Some things that I never use need to be replaced because the reason that I never use them is that I foolishly bought a crappy one that never worked well.</p> <p>When I take just a minute, now and then, to treat myself like a child, I find it a little easier to make the grown-up choice.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/philip-brewer">Philip Brewer</a> of <a href="http://www.wisebread.com/treat-yourself-like-a-child-to-be-more-grown-up">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-personal-finance-skills-everyone-should-master">12 Personal Finance Skills Everyone Should Master</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-do-a-spending-fast-in-16-easy-steps">How to Do a Spending Fast in 16 (Easy!) Steps</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-many-reasons-to-make-do-with-less">The Many Reasons to Make Do with Less</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-only-6-rules-of-frugal-living-you-need-to-know">The Only 6 Rules of Frugal Living You Need to Know</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-frugal-living-skills-you-should-be-teaching-your-children">7 Frugal Living Skills You Should Be Teaching Your Children</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Frugal Living adults children grown-ups needs wants Mon, 21 Jul 2008 12:46:15 +0000 Philip Brewer 2253 at http://www.wisebread.com