Staying Out of Debt – Ignore Your Wants and Respond to Your Needs

One of the biggest hoaxes we play on ourselves is seeing something we want and dressing it up as a need. If you asked people who are in debt to identify the single largest cause of their indebtedness, you’ll probably learn that most people have spent excessive amounts of money on discretionary purchases instead of their needs.

Getting what we desire is powerful, and we all want to feel powerful. The trick is not to be fooled by our desires, and find the power in being financially responsible.

If we were to make a list of common discretionary spending, it would be a simple matter. Let’s give it a try.

  • new car and multiple cars
  • recreational vehicles
  • vacations
  • bigger house
  • meals out
  • entertainment
  • extensive wardrobe
  • big boy toys
  • gadgets

This list probably contains many of the most obvious and largest of discretionary expenses, but there are others that are less conspicuous. They’re less conspicuous because they tend to pile up on us without presenting themselves right in our face. Here are some examples.

  • unlimited cell phone plans
  • cable and pay-per-view TV
  • failure to conserve energy
  • addictions
  • unnecessary trips in a vehicle

What you’ll notice about this list, is it contains smaller expenses that are recurring. It’s not the cost of each item that hurts you financially, it’s the idea that they don’t go away – they keep coming back to haunt you, repeatedly. It’s that repeatedly that starts to add up to big bucks.

Living Within Our Means

If you’re going to stay out of debt, you have to live within your means, and the two best ways of doing it are to eliminate the large discretionary purchases and carefully restrict the recurring discretionary purchases. The key is to identify a want versus a need.

To sort out between the two, perhaps a definition would be helpful. Here are a couple of suggestions:

Need – something essential for basic security, safety, health, income, comfort and well-being, often having a true sense of urgency. In other words, if you don’t have it, you’re putting yourself at risk in the near term.

Want – nonessential items, services and activities that are appealing, yet don’t serve an immediate need for one’s well-being. In other words, if you go without it, you’ll be just fine, now and in the foreseeable future.

Here are some examples that I’m familiar with:

  • Larry wants a new car; but what he really needs is just a little maintenance and a new set of tires on the one he has.
  • Jim wants unlimited cell phone service so he can talk, text, play games and keep himself entertained; but what he really needs is a basic plan that meets his needs for essential communication.
  • Julie wants a new refrigerator; but what she really needs is a service call to replace a failed timer, sensor or control board on the one she has.
  • Clark wants a nice long vacation in some far away place; but what he really needs is to enjoy his business travels as though they were mini-vacations.
  • Kim wants to go out for dinner several times a week; but what she really needs is to prepare meals at home.
  • Lance wants a big flat screen TV; but what he really needs is to limit his consumption of television and be happy with the 20 inch traditional TV he has.

Understanding Your Limitations

Clint Eastwood played Inspector Callahan in the Dirty Harry movie series, and he was fond of saying, “A man’s got to know his limitations.” The same thing applies when we’re considering what we want and what we need. It’s okay to spend money on wants, but you need to understand your limitations. It’s when we go bananas that we fall into the trap of debt. There’s no problem with buying things you like and want. The problem comes when we disguise them in a sense of urgency and call them needs. When you find yourself saying, “Wow, that’s cool,” you’re probably looking at something that qualifies as a discretionary purchase.

Be Tough or be Tethered

My philosophy is to live well within my means. It doesn’t make any sense to me to expend all of my income and live with my nose just above the financial waters. I like some breathing room. It gives me peace of mind. You never know when the waters are going to get rough for a while. That requires being tough. My former track coach called that mental toughness. You’re not going to hurt yourself or go to your grave feeling deprived because you didn’t get to eat out often enough. Hang tough, be tough, and you’ll reap the rewards of being financially responsible.

The alternative is to be tethered to the mortgage company, the credit card company, the oil company that issued you a credit card, or perhaps the finance company where you make your car payments. Being tethered is no fun. What’s much more enjoyable is financial freedom. I chuckle at the bumper sticker I see when in traffic every now and then, it says, “I owe, I owe, so off to work I go.” Now, there’s a person who understands that they’re tethered. I have never put a bumper sticker on my car, but if I did, it might say, “Financial freedom is self-imposed, so is financial slavery.”


Our lives are largely about choices, and like it or not, we are our own life manager. Sometimes we make good choices and sometimes we make bad choices. At other times, we allow others to choose for us, and sometimes we refuse to make a choice at all. But, when it comes to spending money, don’t fool yourself, it’s all about choices that you make. No matter who “twists your arm” or cajoles you into it, you are the one who makes the spending decisions when it comes to your money. The key to making wise choices is to understand the difference between want and need, and make a wise choice based on your understanding of what you would like your financial condition to be. Choose wisely in favor of need instead of desire, for your choices will have long and far-reaching consequences. If you don’t believe me, just ask anyone who is deep in debt.

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About Clair Schwan

4 Responses to “Staying Out of Debt – Ignore Your Wants and Respond to Your Needs”

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  1. Awesome, no nonsense, straight talk that I’ve come to expect on Enemy of Debt. I will share this great material with my followers. Thanks.

  2. Darren E says:

    Great advice; I totally agree with living within your means part. What’s better is living below your means! If you ever switch to a lower paying job, it’ll be easier on the wallet because your lifestyle is the same 🙂

  3. Great post, Clair! Such a simple concept but I think one that many people need to be reminded of. I especially loved these two sentences: “There’s no problem with buying things you like and want. The problem comes when we disguise them in a sense of urgency and call them needs.” – such an insightful thought!

  4. Clair Schwan says:

    The bottom line is we’re in charge and we’re the ones who define what a need is versus a want. We’re either our own worst enemy, our own best friend, or something in between. As my neighbor likes to say, the one who is responsible for my situation is generally the individual in the mirror who watches me shave each morning. How true!

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