Needs vs. Wants

I know some relatives, friends, and co-workers who have faced or still experiencing financial difficulties. A few may be in debt because of being jobless, suffered a tragedy, or someone in the family got hospitalized or in continuous expensive medication. Some make more money but still heavily in debt, while some make less money but able to save minimal amount for future use.

Many of those in "debt status" has common denominators. They usually has personal outstanding loan(s) in a bank, credit card, from their employer, friends, and relatives. Those in desperate mode resort to borrowing from loan sharks and pawnshops. However, despite their negative financial status, I am amazed on how they can afford to have some luxuries in life. 

Others would save to buy electronic gadgets, but would not spend for basic needs. Some would spend money to upgrade their car or buy a new one, yet struggles to pay the monthly amortization of their house. A few has minimal take home pay each month due to company loans, used to spend for travel or fiesta/birthday celebration. 

There are those who spend for expensive coffees and restaurant meals, yet borrows money for the needs of their dependents. One can spend for his vices, yet fails to spend for his maintenance medicines. You may also know someone who had bought a new jewelry, clothing, or mobile phone, yet he/she still owes you money. 

It seems that these types of people cannot differentiate or prioritize their needs vs. wants. Or, they can identify the difference between the two, but lacks self-control to resist the material temptations and give up temporarily the luxuries in life. 

Yes, its their life and I have no business meddling with their financial problems, but its hard to ignore their difficulties when it also affect their job and social life. Besides, it can also be degrading for them to borrow money from someone every now and then.

To be free from persistent financial difficulties, here are some unsolicited tips:

1. Before spending for anything, always ask yourself if you really need it, not just wanted it. If you really need it, then ask yourself if you need the model or brand with all the bells & whistles, or a less expensive basic model will suffice for your needs. Next ask yourself if you can defer or postpone acquiring it for a later period, when you are more financially capable.
2. Try to pay the loans first with the high interest rates, to reduce interest expenses.
3. Pay also the small loans immediately for psychological wins. It will also enable you to concentrate on one or two remaining loans to pay.
4. Save up and pay in cash for major purchases. Some items can be bought at lower prices (up to 20% savings) if paid in cash, than if paid on straight charge or installment basis.
5. Always canvass and haggle on the lowest price possible. Research or do your homework on the best value-for-money deal.
6. Maintain only 1 credit card for emergency use. Leave the atm and credit card at home if you lack self-discipline in your expenditures.
7. If your relatives, friends, or co-workers influence you to spend for unnecessary things, try to avoid them or their "spending influence".
8. Avoid expensive dine outs or coffees. Bring your home-prepared lunch and snack meals at work.
9. Try to save at least 2 months of your monthly salary, as your fund for emergencies or in case you're out of job.
10. Live a simple life. Do not live beyond your means.