THE MINDSET OF WEALTH^® BOOK SERIES EXCERPT

The Inside Track of Money & Wealth:  Know the Game

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EXCERPT

Chapter 2 - Do You Really Need That!

Do you know the difference between a “need” and a “want?” 

A "Need" is something that is necessary for basic survival, such as food, clothing, or shelter.  A "Need" can also be something necessary for your success, such as a car for a taxi-driver, a suit for a salesperson, or books for a student.  Your needs cover:

Ø      Survival items, such as food, clothing, shelter, water, utilities, etc.

Ø      The needs for your success, such as a class, a tool, an outfit, music, stock, etc.

Your needs can change as your circumstances change; for example, if you move to a new city or start a new school with uniforms, then your needs will be different.

Write three things you consider as your personal “NEEDS”

1)     __________________________________________________________________  

2)     __________________________________________________________________  

3)     __________________________________________________________________  

A "Want" is something you would like to have for your enjoyment or leisure, such as a new bike, a new camera, or new shoes.  You want these things not necessarily for any particular survival, but for your enjoyment.  These items are not necessary for your survival; they are not life supporting, but you will often have an emotional attachment to them. 

List three things that you consider “WANTS”

1)     __________________________________________________________________     

2)     __________________________________________________________________     

3)     __________________________________________________________________     

Sometimes wants become needs.  Does this sound confusing to you?  Think about it this way: if you play for an out-of-town team, a bicycle or a bus pass may become a need for your transportation.  A telescope can turn from a want to a need if you plan to study astrology.  A pair of dress shoes can turn from a want to a need if you are to make a successful appearance at an important school function or a job interview.

Try to think of other cases where a want may become a need and explain why.

1)     __________________________________________________________________     

2)     __________________________________________________________________     

3)     __________________________________________________________________     

Having a clear view of your wants and needs is important in your wealth-building budget.  It is important to be sure your needs are met first.  Then you can budget your money to purchase some of your wants.  Think of something you want and how much it costs; write the information in the space below.

I want ___________________________________      It will cost me    $___________

Here’s the hardest part:  You will need to create a budget to buy what you want.  Use these questions to get started.

• How much money will you have to begin your budget?
• How much time do you have to save for your want?
• How much money will you make or will you have to make?
• Have you met all your financial needs first? 
• What purchases can you sacrifice to save for your want?
• Can you find a way to buy your want at a cheaper price?
• How important is this want and what will it do for your ultimate dream?
• What is your plan?

There is an old saying, “Never go shopping at a grocery store while you are hungry.”  The problem is that you spend from your stomach and not your budget.  You will buy unnecessary items, such as snacks (wants) just because you are hungry; these impulse items are always near the cash register (candy, gum, chips).  Eat before going shopping, and you will save lots of money!

Impulsive shopping doesn’t only happen at the grocery store.  What do you think happens when you go shopping for clothes?  If you go to the mall with a lot of money or if you’ll have to prepare for a big party or an event, such as the prom, there’s a greater chance you will purchase items to satisfy your impulses.  To avoid impulsive shopping, budget first, and take only the money you can afford to spend.  Budget first; then go shopping.   

Remember not to fall victim to spending with your emotions.  When your emotions take over, your “needs” and “wants” get dumped into one basket, with the “wants” on top.  The only way to stay in control of your spending is to get in tune with your MindSet and shake out those emotions when you reach for your money. 

SPEND FROM YOUR BUDGET, NOT FROM YOUR EMOTIONS

The Inside Track of Money & Wealth:  Know the Game

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