Nitty Gritty Financialosophy – Needs vs Wants

The Nitty Gritty Financier is someone who most people would say lives a simple life.

The three most expensive things I own (excluding my home and investments) are as follows:

  • Bicycle
  • Camera
  • Computer

You will note a car is not in that list and that is because my car is worth about $1,700.

Yes, my bicycle is worth more than my car!

Of all the other stuff I own nothing is worth more than $1,000.

It took me nearly 6 years to accumulate the expensive stuff in my life.

If I lost all of it tomorrow I wouldn’t be that upset because I don’t NEED any of it.

What you as a person need to survive is actually pretty straightforward.

There are various lists on the essential things for human survival but I think the following mostly captures them all (excluding psychological needs):

  • Water
  • Food
  • Air
  • Shelter
  • Sleep
  • Excretion (the body getting rid of waste)

If you live in a developed country like Canada then most of those very basic needs are taken care of.

When it comes to achieving financial goals you have to be very honest about what you need and what you want because we all have limited income.

The truth is that outside of the cost of essential expenses (explanation here) all other things we buy are wants.

Of course, the Nitty Gritty Financier doesn’t advocate for you to never buy any of your wants.

Life still has to be lived of course!

What I would suggest is that once you have decided on your financial goals that you focus your wants into the discretionary money that is left over.

For example, if after my essential expenses I have $10,000 per year left as my discretionary money I would save $8,000 leaving me $2,000 to spend on my wants.

You may be thinking, $2,000 per year for all the things I want! That is nowhere near enough!

Truthfully though, there will never be enough money for all of your wants.

When you think you have all the stuff you want, new stuff comes along to CREATE another want.

Don’t try to budget for all your wants, instead focus your wants within the discretionary money you have.

Start writing all of them down from most important to least, it could look a little something like this:


Cost per Interval

Yearly Cost

1. The internet $60 per month $720
2. Mobile phone $60 per month $720
3. Gym membership $50 per month $600
4. Camera equipment $1,500 per year $1,500
5. Clothes $1,000 per year $1,000
6. Shoes $500 per year $500
7. Car (including registration and insurances) $3,200 per year $3,200
Total $8,240

I am left with a total want cost of $8,240. In this example though I only have $2,000 to spend on my wants.

Time to make some tough choices if I want to hit that $8,000 saving goal. Goodbye camera equipment, new clothes, new shoes and car.

With just the internet, mobile phone and gym I am left with a total cost of $2,040 per year (close enough to my $2000 want budget!)

This part of achieving your financial goals is not easy but, like the Rolling Stones said, you can’t always get what you want.

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