IntroductionWhat is a need? What is a want? What is the difference between these two? How do they influence us, in Indian conditions? How can we negotiate the complexities? The answers to these questions are sought to be sought in a) Dissecting a need and a want b) Understanding how wants influence our lives c) Goal setting for needs and wants d) Living within one's means and e)leading by example.
Dissecting a Need and a WantWe need to live. We need food, water and shelter. We need clothes to cover ourselves. So, it is clear that needs are basic. Things that we cannot do without. For example, we need good RO water, since the pollution in the atmosphere is so high and municipality water, even if boiled, may not be safe. We need a good breakfast.
For breakfast, home-made iddli and dosa are fine. Or aalu paratha for that matter. Or even rotis and some subji. We are satisfying our need. But if we aspire to have Kellogg serial for breakfast and are prepared to spend upwards of Rs.300 per day, we are getting into the "want" zone. Since the cost is ver high it can be safely avoided by most middle class families. By making it a habit of eating it frequently, we are not living within our means. The wants simply take over.
Understanding how wants influence our livesIt should be clearly understood that wants are products of our desires. It is this desire, this aspiration that drives the economy. No doubt about that. However, we need to understand all the limits of such wants. Every single marketing wizard, sitting in Corporate Offices with all data gathered from the real world through sales forces and accurate customer feedback, normally with MBA qualification from any of the big IIMs, would be plotting some advertising strategy to get you to buy some product or the other.
Take the grooming industry. Today, we have men's face wash and fairness creams for men. So, every young guy, just nineteen and into college, wants to become another Dharmendra or Amitabh Bachchan of yesteryear's and starts finding money of parents to buy these creams that are very dangerous on the skin. Allergies and skin diseases are common. The marketing wiz kids rob most parents and laugh all the way to the bank. These are needs that we can always do without. Convincing our children on the dangers is a big task. But we need to do it.
Another example. Fans are absolute needs. Even if we live in flats near the sea, these are unavoidable. This is a basic need. However, AC is a want. We can have one air-conditioner in our house, reserved for the old or the sick or if we just one child, to be fitted in the biggest bedroom. However, having more than one is not only not needed, it is also an unwanted luxury.
The most important point to be noted is not ape anyone. Be that a neighbor or own sister or brother, who might have settled abroad, and would be having a fully furnished serviced apartment, given on rent. The moment we see such a house, we feel inferior, and we start aspiring for those things. And these leads us to further complications.
Never ever borrow for a want. Even if you do so, liquidate it immediately, within one year. The same applies to every small thing or big thing. For example, if we have to own fancy villas, even our entire life savings will not suffice. Taking a big loan is a bigger risk (bankers and housing finance companies will chase you. What is bread and butter for them is real poison for you).
Why? Because employ-ability is in. Regular employment is all but gone. Even in the Government sector, the National Pension System has replaced the previous Pension System, where the benefits were far more. And days of hyper-inflation are in. Upwards of rupees one hundred thousand is charged for an LKG admission. We can manage such expenses, only if we cut down on our wants. Even a saving of Rs.2000 per month in a recurring deposit, will come in handy. We can easily do this if we try. Cutting down on Old taxi trips. Cutting down on eating out. Cutting down on huge expenditure during festivals. Cutting down on non-vegetarian food. The list is endless. We need to do this cost cutting. We do not have any choice.
Those above 45 are always in the danger zone. Even in the manufacturing sector. Sooner or later, there will be a huge number of trainees and the middle management staff will face the inevitable retrenchment. This may become a big reality. So, we need to be self employed or do something to keep us going. For example, hundreds of former bankers have become full time insurance agents with the private insurance companies. They are doing a fairly good job, in toughest conditions.
Wants drive us to do things we should avoid doing. Excessive aspiration is a huge minus. Fights between husband and wife. Fights with children. Bad feelings and very bad relationships. A hugely debt-driven life. For example, apart from the inevitable housing EMI, we normally find EMIs for costly cars, furniture, and even the costliest washing machines. Clearly, all the things, except the housing EMI, are avoidable. Wants drive us mad. We should clearly understand where to draw a line. A far more application-oriented understanding can be found in
How to make Maslow's hierarchy of Needs Theory meaningful to our lives
Goal setting for Needs and WantsWe need to have clear goals for wants and needs. Needs are anyway taken care. We can do a little cost cutting in the needs space. But the real cost cutting is eminently possible in the case of wants.
Let us take housing. An ordinary flat in the heart of the city would cost at least one crore rupees. Even assuming an eighty percent EMI, a monthly outgo of Rs.86000 with interest, for a family that collectively takes home three hundred thousand rupees per month, is a very costly proposition. Of course, our wives are also earning.
Instead, if we were to go to the developing suburbs, we can even find villas, where the cost will be just forty five hundred thousand rupees. A clear saving of Rs.45000 per month. This should be the goal. Acquiring the villa is one. Planning to liquidate it within ten years is another. Pump all merit payments into repayments. Your wife's yearly bonus can also go towards this. Remember, when you start saving Rs.50000 per month, that amount will take care of the higher education of your child, when you are forty five plus. So, a clear goal is housing in the suburbs. Interest free EMI schemes are available for refrigerators, air-conditioners and so on. All this should be acquired within sixty months of marriage. Without debts.
Setting goals to become entrepreneurs before forty years is even wiser. For example, those who have worked in Infosys Technologies for a decade, have gone to smaller towns like Tanjore (South Tamil Nadu) and even smaller villages near such towns, to set up BPOs where the minimum qualification is only raw graduates. They have incomes upwards of one hundred thousand every month. Such goals are important too.
Living within one's meansLiving within one's means, in each of the aforesaid examples is quite possible if we settle for the middle path. A medium range LED television is enough. A good brand of air conditioner is enough. These "enough s " will mean so much for our peace and happiness. Let us not try to ape the rich. Let us be what we are. Happiness will follow.
Leading by exampleIf the mother herself goes to a costly beauty parlor, the daughter will surely go there too. If the father takes to booze and indulges in costly wine, the son will simply ape him. Our children follow us as big role models. Even for the absolutely wrong reasons. It is so essential that we understand this.
When we start leading by example, and doing away with all wants, we will have achieved so much in life. Wants are always there for the rich and super rich. Wants are never for the middle classes. Even the upper middle classes. Leading by example is a huge imperative here.
Hence, if we understand that every want is a product of our desires and also know how to minimize such desires, we will have scored very high on living within our means.
We should clearly understand that we do not have any choice.
The author has presented nicely the difference between the need and want. Needs are to be satisfied. Once the needs are satisfied we can think of our wants. But before thinking of our wants we should think of our tomorrow also. Many of the people these days are employed in private organisations where there is no security for your service. The company may not need you at any moment. So we should keep this also in our mind before going for the expenditure. So I always say to my sons that what you earn in a month should be sufficient for two months at least. The expenditure should be planned in that way. So there will be good savings which can take care of retired life or forced gaps in the service.
Another point is as you grow up your wants may become your needs. Our aspirations may also increase. But nothing wrong in it as long as your financial position is good and you are able to save at least 40% of your earnings even after that expenditure also.
An excellent article with precise narration regarding the need and wants and the boundary between the two.
Our lust for more materialistic facilities and luxury is the basic reason for our wants to cross the threshold of balanced living. Unfortunately, we are much influenced and impressed by the riches of others and have dreams to have same wealth in our hands so that we can also present our extravagant ways in the society and attain the foolish satisfaction and proud of being rich.
The real people are those who even after being rich contain their desires and wants to the minimum level and instead of spending their money in luxurious life style will prefer to give it for humanitarian purposes. These prudent people will never be unhappy in their life as they know the real mantra of simplicity.