The question of what you “want” vs. what you “need” can be a tricky discussion filled with hidden dreams and pent up anger.
Your feelings over this question might range from guilt to gratitude, battling between your adult brain and your inner child. The adult holding closely to gratitude for health, shelter and security, while the child wants fun and glitzy toys to satisfy something lost or never realized.
First, it’s important to define what a “need” actually is. While everyone’s definition of a “need” will be unique, a great deal depends on what you learned about money in your childhood. If you learned strong messages that support financial well-being and a secure sense of what money provides, you are more likely to have clarity. If however, you witnessed money dysfunction, arguments over money, or parents with disparate money views, you are more likely to have mixed or insecure feelings about the role of money in a happy life.
In a recent meeting with clients, we discussed this topic.
Cathy spoke first, “We basically have everything we need. We can afford our lifestyle and I am grateful for what we have. I don’t want to get into a situation where our expenses get out of control and unaffordable. We’re just fine.”
After a short pause, Karl answered, “Yes, sure, our needs are covered. But I think we should factor in more vacations and you know I’ve been thinking about a larger home with more lawn space.”
“Right, so first comes the fancier vacations, the bigger home, more rooms to fill, more tools, more toys more stuff, more pressure to keep up. What’s next, joining a country club? No thank you! I think we need to focus on building our nest egg and putting money aside for our children’s education.”
Karl, somewhat deflated, answered, “I understand where you’re coming from. But don’t I get a say, too? I know you’re satisfied and grateful and that’s wonderful. But I have dreams too and they should account for something in our planning.”
The gauntlet was thrown and the challenge clearly stated. Cathy’s needs were satisfied, and thus she longed for little more. Karl acknowledged both her needs but also his wants. They were seemingly at an impasse. It was time to break the stalemate.
I said, “Cathy, Karl, how about if, in your financial plan, we could see if your financial success could accommodate more than your current level of spending and accumulation? Would that give you the confidence that you could, perhaps, take more vacations, or buy a home with more land? Would that help you be more comfortable?”
The silent consideration was broken by Cathy. “Karl knows that I’m pretty down to earth. My kids have friends in their schools, which I would not like to change. I have worked my entire life and I’m satisfied with that. I just want to make sure that any changes we make will not cause a disruption in our family or friends. You know, sometimes, you buy a fancier house and all of a sudden people think you’re too good for them. I want my life to remain manageable.
But, sure, maybe a vacation or two could be fun, just nothing too extravagant.”
Karl nodded, sensing progress. It was a good first step.
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