Here’s how I see it.
- Basic Food — Cooked from scratch
- Shelter — Rented or not, ideally in a safe environment
- Clothing — Basic clothing to keep warm (e.g. winter coat)
- Basic utilities — Included in the shelter, like water, electricity
- Basic transportation — Public transportation, or a serviceable car
- Everything else.
Pretty simple, right?
THOSE ARE MY TRUE PRIORITIES, THE REST IS FLUFF
I’m sure it seems hypocritical to be saying all of the above, when I am clearly not living with basic needs, and I have my wants in there too, but if I didn’t have any money saved with a goal of saving 75% of my net income each year, and if I was making less money, those needs are my priorities.
Yes, I have a laptop, the internet, a washing machine, and all of these other great modern-day appliances, but I am well aware that they are wants, not needs.
I can always do my laundry by hand, but why should I? To save $5?
I don’t have a need to save $5 on something that would take a lot of my time and effort, when I am already aiming to save 75% of my net income.
I can always go to the library to read rather than paying for an e-magazine subscription using the Zinio application on my iPad, or use the free internet there instead of having a connection at home — but I don’t need to live like that.
However if I had a bare minimum salary, I would need to live like that and I recognize where my budget would need to be slashed.
Even for transportation.
I know in the U.S. this may not be entirely applicable unless you live in NYC, but a lot of urban cities have public transportation!!!!!
So unless you live out in the country and/or you truly cannot get to work without a car because it’s so far north that it has no public transit, then it’s really just a question of your time rather than money.
I had no license and no car, and I still made it to work in another city by commuting 4 hours a day (2 hours there, 2 hours back).
I had to take 3 trains and a bus. But you know what? I did it because I had to.
I quickly got my license after that, which cut it down to about an hour and a half a day, but when you don’t have a choice (in my case, a license), then you make it work and you do what it takes.
It was even cheaper to keep taking public transportation at 4 hours a day, because I only spent $10 a day getting there and back! That’s $50 a week or $200/month.
With a car, here’s what I envisioned as the cost per month
- Lease = $200
- Gas = $75
- Insurance = $250
- Maintenance = $50
Total a month for a car = $575 versus $200/month for public transit.
What I really saved: 2.5 hours of my life each day, 12.5 hours a week or 50 hours a month.
DON’T CONFUSE WANTS WITH NEEDS
So that smartphone at $80/month that you need?
You don’t need it. Heck, you don’t even need a cellphone if you can’t afford it.
Make it work with a $10 landline… you know, the way people used to live before we had mobile telephones? 🙂
ONLY PAY FOR THE WANTS THAT MATTER TO YOU
I am not ever saying to only pay for NEEDS and not WANTS.
I’m just saying to choose the WANTS that matter to you. REALLY matter.