Knowing needs versus wants can make you richer 1

Knowing needs versus wants can make you richer

Aneth Ng-Lim

Posted at Jul 01 2019 09:55 AM

If you want to hang on to your savings, I don’t suggest a visit to any shopping centers until August. That’s because most retailers are dumping their inventory mid-year and sale signs are everywhere.

Those red banners used to attract me like a bull, and I could never resist not going in to at least check out the good deals, and then coming back out later with shopping bags.

The same thing happened just this weekend, and while I came out empty-handed, my daughter did not. That meant my wallet still took a hit. 

It’s been a year since I started writing for ABS-CBN Digital, and this column has largely been about personal finance. As I shared advice from individuals on what they do with their money, and what they don’t do, I was learning too. Their stories have inspired me – both their triumphs and failures – but I must admit I spent more time thinking about their past mistakes.

I consider history a great teacher, and taking note of where they felt they went wrong may mean I can avoid that path. One advice that came from most of them is knowing their needs and putting those ahead of their wants. It may sound simple, but not easy to live by in our consumer-driven society.

Because there are 31 days in July, here are some words of wisdom that may help you hang on to your wallet and to your savings and resist the impulse to shop for things you long for, but won’t really miss in your life.

#1 Audit your closets.

I never had a chance to really go through my closets until I retired from corporate life, and what I found shamed me. I found clothes I do not remember buying nor wearing, handbags still in their packaging with tarnished buckles, and shoes impractical for daily wear. Clearly at one time I had more money than sense, and if I only knew better, I would have more money today.

That audit made it easier for me to walk away from stores without buying anything, and I suggest you do the same for pantries and any parts of your home where personal items are kept. You’ll be surprised to discover how much space those “wants” are occupying, and how much poorer buying them has made you.

#2 Keep track of the “evidence”.

Those clothes and bags and shoes I did not even know I had? I took photos of them using my phone, and would look at them when I am tempted to shop again. They serve as excellent “downers” and allow me to walk away nearly every time.

You can choose to keep track of your evidence another way, but the point it is to make notes and place them somewhere easily accessible, so you don’t forget when the next sale comes around. Whether they are notes or photos, they are visible reminders of our “wants” and “money mistakes”, and we should learn from them.

#3 Host a garage sale.

My two teenage daughters wanted to “update” their closets – and that means they want to shop. When we audited their closets, we found many of their “wants” and “buying mistakes” which gave me a lot of opportunities to say “I told you so.” I agreed they can shop with money they earn from selling their clothes.

I was surprised to hear them say yes so quickly. Turns out it is now easy to sell unwanted items through social media. They put up an online account and began posting the photos of the items and got feedback. They are now arranging shipping and meet ups, and I look forward to less clutter in my home.

What’s more, this is another “evidence” I can pull out anytime they ask me for money to shop. Because while they can raise money from their sale, we are all still losers here. After all, you can only try to sell these items at 20 percent to 50 percent of their retail price, so that’s 80 percent to 50 percent down the drain. 

#4 Give, because charity is best taught at home.

One more request I made to my daughters is that half of what they make will be donated to charity. I wish I can write that they said yes right away, but they tried to negotiate this. I was firm and told them that one way to make all their buying mistakes less painful to bear is to make sure that people are helped.

Midyear is also a critical time for many charities. It’s assessment time to see how they are doing against their fund raising goals, and every year, it gets harder for them to find the money to support all their projects. This is also the time when non-profits involved with children like Childhope Philippines Foundation need donations to send and keep the kids in their care in school. 

In the case of Childhope Philippines, they have a program called Hope Closet, where you can simply hand over gently-used clothing, toys, books and other personal items you no longer need so they can in turn pass on to the kids and families under their care. If your items do not find a match, they will keep and sell during their garage sales hosted throughout the year.

#5 Make friends using your white elephants.

There are groups that welcome your white elephants, or you can make a group yourself with your friends. Sadly, many of us do have white elephants at home, but as the saying goes, one person’s trash is another person’s trash, er, treasure.

A white elephant is any item you own that you find useless or troublesome, especially one that is expensive to maintain or difficult to dispose of. If you have friends that you’ve been wanting to see, why not host a white elephant exchange, and all of you can bring your white elephants and trade. You can make it a rule to share how each of you came to own the white elephant, and maybe that will help people in the room become smarter shoppers!

#6 Make a wish list because you deserve to be rewarded too.

We’re all human, and one of the triggers that can make us want something really bad is when told we cannot have it. So go ahead and make a wish list of the things you want – not need – and keep it close. After all, “wants” go on sale too, and when a good deal is to be had, go ahead and reward yourself for your hard work.

Having a list can make you more disciplined towards spending, and may even make you think twice, and shave off some items over time.

#7 Keep busy with things that add value to you.

I once worked for a company that owned a portfolio of shopping centers. We made an interesting discovery during one of the economic downturns: when times are bad, people are more likely to treat themselves to a gourmet cookie, signature cookie, or an expensive meal. 

I guess when you are feeling down, you need a pick me up. That’s fine but there are other less expensive ways to enjoy the same high from a pick me up. Why not volunteer and feel joy from having helped people in need? Or do items #1, 2, 3, 5 and 6? All those will keep you engaged and end up with extra cash in your pocket instead of less.

One thing I hope you take away from all these: when you learn to spend for your needs and avoid the wants, you will not necessarily become rich, but you are guaranteed to be richer. And more money for your savings is never ever a bad thing.

Disclaimer: The views in this blog are those of the blogger and do not necessarily reflect the views of ABS-CBN Corp.