Yet Another List – Needs vs. Wants

Recently, Kathy Merlino over at Kathy’s Retirement Blog, wrote a post called What Is Your Relationship with Money?  It seems that some folks really took exception to Kathy’s use of the term ‘Blow Money’ for that money which has been earmarked for “discretionary spending.”  She and her hubs allot a certain amount each month to spend as they see fit – without questions!  I think it’s great – It’s not “Money Blown” as her next post suggests, but rather money which is spent making their lives wonderful!  Yep, actual money for LIVING!

Hubs and I use a similar but slightly different “strategy.”  We keep what we call the Needs and Wants List:

Our Needs-Wants List

On the Needs side, we list things that are going to REQUIRE upcoming expenditures:  A new roof.  Tires for the car.  On the Wants side, we list things that come up that we would like to purchase, but are not actual necessities:  New tile in the guest bath, refacing the kitchen cabinets, those diamond encrusted wine glasses (OK…. Not really…. surely you know me better than that by now!)

The point is that the list accomplishes two things for us:

  • First, by putting an item on the list, we are forced to analyze our motives.  Is this something we really need, or is it something we’d just like to have?
  • Second, putting items on one list or the other allows us to prioritize our spending, while slowing down impulse buying (at least on larger items.)  Have you ever stopped to think something through like this – “Which would be more important to us…a new toilet or new carpet in the family room?”

The list is generally for bigger ticket items.  We have always had a shared bank account, and because we both have similar financial values, we don’t get crazy on the day to day splurges.  (Yep, occasional quilt fabric counts as day to day spending.)  Neither of us is a compulsive shopper – I repeatedly remind him that he is a lucky man, because clothes shopping is just not in my wheelhouse!  Our Needs and Wants list helps us to think about the question, “What do we need to save for, and what should we “blow money” on?”  In either case,  we believe that as long as it’s thoughtful, deliberate, and within the retirement budget, none of that money is actually “blown.”

18 thoughts on “Yet Another List – Needs vs. Wants

  1. MrFireStation

    We divide up our discretionary income a few ways: 1) house money – for improvements/furniture; 2) travel – vacations for the year; 3) philanthropic spending; and, 4) “sunshine funds” – discretionary allowances we hold separately from the joint family spending (fun money). Works for us.

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  2. susan@marsha'sbungalow

    Isn’t it wonderful to be married to someone who shares your financial viewpoint? I am lucky like that, too, and I can only imagine the grief of two people who have to compromise over how to spend their joint money. I admire your discipline in making the needs-wants list.Those kinds of things I think are just absolute fun.

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  3. Retirementallychallenged.com

    It’s interesting how couples work out money management that suits their individual relationship (and if they don’t, they are in BIG trouble). My husband and I also have very similar, frugal, spending styles. We keep our money pretty separate (maybe because we got married fairly late in life), but then have a joint account for house needs, travel, utilities, taxes, etc. I really like that we can “blow money” (I have no problem with her term) on individual wants because each of us knows that we are ultimately responsible.

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  4. Tawcan

    I think it’s fine to spend a bit on “wants,” as long as you have the money. That’s why we set aside some money each month toward “wants.” Then when we spend the money we won’t feel guilty.

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    1. Encore Voyage Post author

      I think it’s not only fine, it’s absolutely necessary! You can’t spend your life saving everything for the arrival of some day in the future. You must enjoy the journey, too!

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  5. aginggracefullymyass

    We don’t need no stinkin’ lists! We just wing it – ugh. We have actually been awful in the planning department (should I admit that?) but somehow it’s all managed to work out. So far. We’ve both been equally frugal for most of our adult lives primarily because we didn’t have much more than what we needed to cover our expenses. Now that the nest is empty and our kids are self-sufficient, we’ve been a bit more “careless” with our spending. Eating out a lot, vacations to cool places, a new car last year, etc… I see this as coming to an abrupt halt when hubs retires next year. Unless I can get my eBay business cranking… Or convince him to postpone retirement for a few more years! 🙂

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  6. dkmcl2

    Great post Lynn. Makes you think. We’re just wingin’ it over here right now. Things will be different when I’m joined (if ever) by my wife on my solo journey, so far! ….Dave 🙂

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  7. vanbytheriver

    Similar in taste, values and financial sense, we have both been savers/investors and more or less thrifty (aka cheap) our whole lives together. We’ve never had/needed a budget. I cook all the time, and he works with plumbing, carpentry, electrical systems, automotive care as hobbies. That has made a huge difference. It seems to have worked for over 40 years now. ☺

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  8. our next life

    I love the idea of this list. By forcing yourself to put everything on it, or at least the big expenditures, you do have to question how important that spend really is to you. And separating needs from wants is so important! We aren’t sure exactly how we’ll structure our finances once we get to retirement, but lots of good tips here for us. 🙂 Thanks!

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  9. ambertreeleaves

    A very simple yet effective way to avoid impulse buying and to set the right spending priorities. I might give it a try.

    For the smaller sized items, we have fun money that we can spend or pile up. I have been piling gup and now we can have a kids free weekend at the end of the month.

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  10. patwdoyle11

    I agreed with Kathy as well on a concept of “blow money”. Not what I called it, but what we’ve always had. After the savings and essentials/needs, there was the discretionary – his and mine. As I was the saver and he the spender, it helped to have it outlined in this order. Savings for retirement way before before spending allowed us to retire early! And, if one of us wanted to save up his discretionary (say for a diamond ring for his wife’s 50th birthday – the one she drooled over all the time), then that was fine. Or he could buy (yet another) biking gadget. We’ve continued the same with discretionary since retirement…. hence I see a new leather jacket on the hanger in the bedroom – his, not mine. But I’ve my eye on one as well…. so its all good!

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    1. Encore Voyage Post author

      Our generation grew up learning to “pay yourself first…” I’m certain that the concept of saving for retirement before everything else is what’s sorely missing these days!

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