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Unlocking Financial Freedom: Using Needs vs Wants

"Too many people spend money they haven't earned, to buy things they don't want, to impress people they don't like." - Will Rogers

 

Pregame Prep (today's overview)

I believe it's crucial to prioritize your needs over your wants so you will achieve financial success. Today I'm discussing my thought process and some of the things I've done to find a life of freedom. What you will realize is most of what I write below is common sense, you might already know most of this, but are you incorporating it in your life? I encourage you to take action even if it's small steps because consistency adds up over time.

The quicker you understand the difference between needs and wants and understand just how important it is to save and invest the faster you will find freedom and happiness. In today's world it's easy wants for needs, but having a clear understanding can be the difference between achieving financial freedom and struggling to make ends meet.

I know this is obvious, but sometimes we miss obvious points or our mind just chooses to ignore them. Needs are the essential things we require to survive, such as food, water, shelter, and clothing. Wants, on the other hand, are the things we desire or wish to have, you know the fancy cars, the fast boats, luxury goods and expensive vacations, etc... Wants are nice, but they are not essential to our survival.

Keep reading you will see I'm not suggesting you live like a monk, I am suggesting some shifts to your mindset to ensure that you have enough money to cover your necessary expenses and then build up your savings for the future. Allocate some leftovers for towards your wants, but for me delayed gratification really paid off.

Film Review (my experience)

For over 20 years, I lived a life focused on needs versus wants. I was a proponent of the FIRE (Financial Independence, Retire Early) movement before it even became a popular topic. And while I understand that there are no guarantees in life, I know that my commitment to saving and making wise investments allowed me to leave my career in IT Management and live a life I am truly grateful for. I understand the principal of jumping and the net will appear, but I will admit I spent some time securing my net before I took my leap.

Dave Ramsey constantly says: "live like no one else so later you can live like no one else." And that's exactly what I did. I made a conscious decision to prioritize my future financial freedom over short-term wants long before I heard Dave talking about it. I do admit it was good to hear someone else who thought the same way because sometimes it feels lonely going against the grain!

Let me be clear here: I'm not talking about NEVER spending money on anything fun. It ok to have a moment where you splurge occasionally, but avoid comparison traps where you are spending money or doing things just to keep up with your friends or show off on your social media feed. I just made sure that my spending was in line with my long-term goals.

Living like no one else now so you can live like no one else in the future requires sacrifice and discipline. It was not always easy but it was worth it. With a solid playbook, you can take control of your financial future and live a life of freedom and abundance. Here are some of the ways I lived like no one else so I could live like no one else.

Offensive Game Plan (actions to obtain freedom)

Define your goals: What do you want to achieve financially in the short-term and long-term? Knowing your goals will help you stay focused and motivated. Get specific with your goals too, it shouldn't just be I want to be a millionaire. Define how you become a millionaire if that's what you want!

Track your spending: I dislike this as much as you do... BUT... You have to track your spending, you have to take a close look at your spending habits and identify areas where you can cut back. You have to plan ahead if you really want this to work quickly and efficiently. There are so many budgeting tools out there: Mint, You need a budget (YNAB), Personal Capital.. I could go on, I would encourage you to use a free one of course, but as long as you use budgeting tools and apps to track your expenses and hold yourself accountable that's all that matters.

Increase your income: Look for ways to earn more money. Building income streams outside of your main income is SO important. Consider starting a side hustle or taking on freelance work to increase your income streams. Tiny streams of income add up over time. Don't tell me you don't have extra time outside of your job, if you are working 80 hours a week you need to be looking for a new job or figuring out what's going on with your budget.

Invest wisely: This starts with paying yourself first! It's important to save and invest. Put money in accounts where you don't see it if you are tempted to spend it on things you don't really need. Consider investing in the stock market and real estate. You may be surprised to learn you don't have to have huge sums of money to get started. Just be careful because salesmen are everywhere. So try to understand how the company or person giving you advice is making their money. I've seen far to many people making a living on commissions for "products" that are just schemes to take money from clueless investors. Bigger Pockets is awesome for real estate. Good Kids Trading is great for stock trading. I enjoy some of the ideas from Bogleheads for long term investing.

Defensive Game Plan (actions to defend your freedom)

Avoid impulse purchases: Before making a purchase, ask yourself if it's something you really need or just want. Avoid impulse purchases that can derail your financial goals. I have a 'rule' where I have to wait at least 1 day before I make a want purchase. I can't tell you how many times I would buy something then never use it or had regrets before I made the decision to just give it a day or two.

Check your credit cards for subscriptions or services you aren't using. There are apps that can do this for you now, but those didn't exist when I started this. I'm a huge proponent of reviewing my statements and knowing what is going where. If you aren't using it, stop paying for it. It's SO simple and it makes a huge difference.

Don't succumb to societal pressure: Just because everyone else is buying the latest gadgets or driving the newest car doesn't mean you have to as well. Stay true to your financial goals and priorities. Everything changes when you hit your longer term goals and the people who have all the fancy cars, homes and toys start asking you how you were able to quit your job to chase your passion and dreams. Society (including banks and credit card companies) want us to think that all these loans and mortgages are normal. They love to see people refinance so they continue to make obscene amounts of money on interest while we barely pay off the principal.

Keep a level head: Don't let fear or greed dictate your investment decisions. Stay informed, do your research, and make rational decisions based on your financial goals. There are so many podcasts so many forums and communities where you can learn, you can share your concerns and get tips and advice to help you meet your financial goals. If you need more websites just reach out to me.

Stay disciplined: Financial freedom doesn't happen overnight. It takes time, patience, and discipline to achieve. Stay committed to your goals and stick to your playbook. It's not always easy, if you give into a want and you have regrets or guilt, just let it go and get right back on your plan. We're all human there is no need to get stuck in a loop, remember your internal dialog is very important.

Post-Game Review (key takeaway)

One of the most significant benefits of understanding the difference between needs and wants is that it allows us to appreciate the things we have. When we focus on our needs, we become more grateful for the things we have in our lives, such as our health, family, and friends. We begin to see our wants as extras or bonuses, rather than necessities.

Understanding the difference between needs and wants is essential to achieving financial freedom. By prioritizing our needs over our wants, we can build up our savings, make informed financial decisions, and appreciate the things we have in our lives. As a freedom coach, I have seen the benefits of this approach firsthand and would encourage anyone looking to achieve financial freedom to adopt this mindset.

Hey Coach! (Connect with me)

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I know you can do this on your own, but if you need my help or suggestions I'm always here Lets talk

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