Donald Horban taught this amazing simple concept:
“We don’t need to increase our goods nearly as much as we need to scale down our wants. Not wanting something is as good as possessing it.”
We must learn to prioritize and scale down our wants so we can get off the financial treadmill. As long as our wants take over our emotional reasoning, we will never get all we want and thus never be satisfied. We will die wishing we had done or acquired just one more thing. Expectation is an enemy to all of us!
I would like to take a look back at the “good ol’ days” when we had fun playing kick-the-can. We sat on our porch and visited with our neighbors. We had a party-line with three other families using the same phone line. Going back in time the TV networks quit at 10 in the evening — no TV shows after that. And we did not have the ability to record and play-back any of the three channels.
I remember walking everywhere, then got a bicycle when I was 12 and this was an amazing step up in transportation. At that time, homes could be purchased for $12,000 and everyone knew everybody. I did not dare do something wrong or one of my six aunts would be there on my tail faster than my mother. I went to school with kids who came barefoot because they had outgrown their shoes and their parents were saving up the cash to buy new ones — until then, they just went without. Vacations were defined as camping with sleeping bags in the back yard. Fishing was catching carp, or trash fish, in pools of water after the spring run-off. The most likely meat I ever ate was venison. My dad and three older brothers usually hunted four to eight deer every winter to cut up and place in our freezer. This meat would last us a whole year, plus we gave many wrapped pieces to widows in our neighborhood.
Now we have a lot more choice — several more options for food, clothing, shelter and transportation. We have cell phones, the internet, and cable TV with recording options. Children don’t go without shoes if they outgrow them — their parents simply buy new ones on a credit card if they have no cash to pay for them up front. Cars are faster, we have more options to get around, socialize, play, and learn. So why aren’t we any happier today?
Most children growing up in the U.S. today will never have the opportunity to be connected with their food source, including the experience of milking a cow. They will not wash dishes with their own hands. We have become automated and accelerated to the point that we want more, have more, and have the time to make more happen. But this only increases our desire for more, making it more difficult to distinguish between wants and needs.
Time to scale down wants. With all the time, resources, and products we have we are not any happier (and perhaps less happy) than people were 50 years ago. To have more financial security, peace, and happiness you must learn to be happy with what you have (and you must teach your children to do the same). If we are never satisfied, surely our children will learn this from us. Every day you part with your money is another day you have to work, not only for your own insatiable wants but for the wants you have planted in your children as well.
How can you scale down? Start out by spending only one-fourth of what you have been spending each month for the next six months, then up that to half of your spending for the remainder of the year. In addition, be sure to create a spending plan (like the one I mentioned in my last blog on Emotional Spending) with categories and include a category for paying yourself (or savings). Even if you have debt and other problems looming, we have found that almost all of our clients can find at least 1% of their gross monthly income they can put in savings. After you have saved this for a few months, work up to 2, then 3 and finally shoot for saving 10% of your income every month.
Example: Income of $50,000 a year equates to about $4,100 a month; 1% of that $4,100 would mean you would save $41 each month. I know virtually anybody can save 1% of their income each and every month. If you can not do this, then at least try not to over spend your income. This means you have to be in balance, which also means you must have a spending plan so you can see that you are in balance. In other words, try improving a little bit over time. Track you progress to make sure you are making improvements.
Finally, please give yourself peace of mind by doing the following:
- Set a date each week to review all finances either with yourself or partner.
- Make a list of where you want to be in 1, 2 and 5 years.
- Implement plans each week and watch yourself grow!