Needs vs. Wants: Making Difficult Choices To Become Debt Free
Each of us may have a different way of how we repay debt. Some people may just be fine acquiring large debt as long as they can sustain their daily needs and make the minimum payment. While others may see it a heavy load that they’re carrying on their shoulder. These people are likely putting their debt payment as their top priority.
The equation is simple: The more you prioritize your debt payments, the faster you can get rid of it. However, in this notion, most people may have a hard time determining which are needs and which are wants.
The definition will actually depend on the person, but needs are generally defined as something that is essential – something that a person can’t live without.
Examples of Needs
Shelter – difficult choices may involve selling a home and then renting a unit that you can afford, or maybe living with your parents if possible
Food and Water – You can live without eating fancy food or luxurious beverages. What is important is eating healthy within budget.
Health – Laser surgery is costly. In contrast, don’t just decide to do such with a merely cracked tooth, dealing it as a need.
Clothes – Getting the latest trends of fashion apparel is just wanted. For as long as you have decent clothes to wear that will surely be fine.
Wants are the things that you can live without. These are things that are just your desires.
Examples of Wants
- Going on a trip or vacation
- Cable TV
- Home Modifications
- New Car
- Cell phone
- Entertainment showcase
Making Difficult Choices
You may have some of these wants that you considered as needs even if it’s something that is not essential. Perhaps, you need a cell phone for your job or it might be something useful to keep you up to date with the latest activities of your sports team.
The real question is: Are you on your feet to get out of debt? How much are you willing to sacrifice just to eliminate your debt. While a few may not perceive their debt as a problem, this attitude will result in drastic results.
Conversely, if you’re serious in paying your debt, and you tend to confuse yourself in sacrificing the wants that you don’t want to let go, then you’re facing difficult choices. You might consider weighing your options before making a decision. Every excuse that you make to justify your wants as needs is a pitfall that will sway you toward the path of becoming debt-free.
Your Spending Attitude
Your attitude will determine your success.You can track your spending on a daily and monthly basis and evaluate your finances. This way, you’ll be able to make sure that your spending wisely. Hence, you might need to work on your spending habits to align your finances for a better tomorrow.
CONSUMER PROPOSAL EXAMPLE
Example Unsecured Debts
|2||Credit card 1||$6,812|
Your Monthly Repayments Would Be
a Consumer proposal $748
(total contractual repayments)
a Consumer proposal $295
(total contractual repayments)
* Subject to creditor acceptance
* Payment subject to individual circumstances
* Credit rating may be affected
* Fees apply, subject to individual's circumstances.