12 Costly Necessities That Aren’t.
Posted: September 11th, 2008 | Author: Joe | Filed under: spending | Tags: Frugal, Frugal Lifestyle, Saving, spending | 3 Comments »BankRate has an article titled “12 new ‘necessities’ that drain your cash,” but while the article highlights many things that are not really necessities, some really are.
“… modern life has created a host of “new necessities” that many people swear they cannot live without — a daily latte, premium cable, a weekly manicure, a new leased automobile and cell phones for the family.”
How many people agree with this? I’d bet that if you’re even swimming in debt, not necessarily drowning in debt, you’d agree with the above. It’s all part of what puts people into debt in the first place – our ability to fool ourselves into increasing our spending to fit our income, instead of fitting our lifestyle to our income minus savings.
“In reality, there’s a more accurate word for those pricey add-ons: entitlements.”
BINGO!
“If you want to significantly cut spending, it’s important to take a closer look at what you consider to be needs.”
This can’t be stated strongly enough. If you want to get out of debt, or live on a single income it’s absolutely imperative that you take stock of your financial situation and decide what is truly essential.
The BankRate article quotes Mary Hunt, the author of “Debt-Proof Living” who “fell into the entitlement trap” herself and racked up $100,000 “in obligations before she realized that so-called bare necessities were burying her in debt.”
She says:
“When financial ignorance and availability of credit meet ugly attitudes of entitlement, that is a recipe for a horrible disaster. “
Amen!
Also quoted is Jeff Yeager, author of “The Ultimate Cheapskate’s Road Map to True Riches.”
“…the irony is that the more we consume, the more we are consumed.”
Beyond the poetic beauty of that statement is a scary reality. Think hard on that the next time you buy one of these necessities that aren’t:
1.) Daily latte.
This is kind of a no-brainer, and much of the basis of David Bach’s Automatic Millionaire. $25 a week adds up over a year. Do the math and reconsider.
2.) Cable TV.
Yeah.. this one is sneaky because it’s so easily seen as a necessity of modern life. It’s made worse by the cable company’s billing plan. Basic cable isn’t too expensive, but you get almost nothing for it. And of course, if you want high speed Internet you have to get the most expensive cable tier before tacking on an extra $40 a month for Internet. Before you know it, you’re shelling out $100 a month and using very little of what you’re paying for.
3.) Manicure/pedicure.
This is a tough one. I’m a man, so naturally I think things like this are a waste… but, it’s probably safe to say that for most people it isn’t a necessity.
4.) Botox.
Unless you’re in the media, or running for president this is clearly a waste in the name of vanity.
5.) Bottled Water.
Can you imagine 20 some years ago if someone asked you if you’d like to pay $2 for water? Pay $2 for something you can get for free from your tap! You’d probably laugh them out of your personal space, but that’s what many people have been marketed (programmed) to do today. It’s a ridiculous waste of money.
6.) A Second Car.
The BankRate article states:
“Hands down, a second car is the highest-ticket “new necessity” in America today. It’s so prevalent that Yeager is doing his book promotion tour by bike just to point up the sheer absurdity of our one-person, one-car paradigm.”
I actually disagree with this one, quite a bit. I believe that a luxury car is not a necessity, but any 2nd car is absurd?
My wife is a stay at home mom and takes our daughter to preschool 2 times a week and speech therapy 2 different days a week. So her schedule is driving to and fro 4 mornings every week. In order for us to afford the luxury of living on a single income we’ve had to cut back spending on a lot of the “necessities” in this list, but I also have to drive 45 minutes to my job every day. I wish I didn’t, but that’s where the money is, and we don’t want to live in the city, so I commute. I don’t think our life style is that unique in this regard, but there is no way we could live our lives with one car.
7.) Cell phone.
This is a big one in my mind. I’m not going to argue that most people don’t need a cell phone, but I would argue that most people don’t need the cell phone they have. The majority of people are paying costly monthly plans for minutes that go unused. I know. I used to be one of these people. Then I got smart, did the math and realized how much I was paying in a year and how little I was using the service. So I downsized and got a pay as you go phone. Now I actually use the service I pay for and save a bundle. Oh, and children don’t need cell phones any more than they need the latest video game or a can of Coke-A-Cola at every meal.
8.) Lawn service.
I’d say this is not a necessity. It’s property vanity, right up there with keeping up with the Joneses. I guess it’s a plague of suburbia to want your lawn to look like a golf green, but I just don’t get it.
9.) Clothes.
OK, so clothing is a necessity. But, designer clothing is not. This is probably a woman thing too since most guys I know are content to wear the T-shirt they broke-in during college 10 years ago.
10.) Private school.
I don’t know about this one. Is it a necessity? Maybe. I mean Private school is expensive, especially when you realize you’re already paying for public school even if you don’t use it. But at the same time, many public schools are not very well run and parents have every reason to want to send their child to an alternative. That’s the reason why school vouchers never really went anywhere – if most parents had a choice (that didn’t cost an exorbitant amount) they would take it. I guess this one falls under the priorities umbrella. If you’re a parent and feel strongly about private or Catholic school, then it’s about as close to a necessity as you can get.
11.) Childhood parties.
This is a big non-necessity in my mind. I’m not saying kids don’t need or deserve parties, but the level of party some kids get is absurd. We’ve taken our daughter to her friends’ birthday parties held at bouncy houses and arcades. This is ridiculous. They’re 3 years old and don’t need their parents going $600-800 in debt for a party they won’t remember 2 years later.
When our oldest daughter turned three, we had a modest birthday party with our close friends and relatives. Our thinking was that 1) she wouldn’t remember not getting a pony. 2) She had no expectations of such since she didn’t remember her 2nd birthday and we never told her about a magical birthday complete with ponies.
My point is this: Many times, parents feel that their children need the fairy tale party of the parent’s dreams, but the children are perfectly happy with friends, family and pizza.
12.) Pet grooming/walking.
I couldn’t agree more. If you can afford it, then there’s nothing wrong with it. Just don’t think it’s a necessity for fluffy to have fluffier fur at the expense of you going into debt. And call me heartless, but I’d add pet insurance to this too. When my grandparents or parents had a pet that was ill and they were told it would cost $1,000 to make the pet well again, they would let nature take its course. If it’s God’s will, then let it be.
What say you? Leave a comment and weigh in.
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[...] jefferson wrote an interesting post today onHere’s a quick excerpt“… modern life has created a host of “new necessities” that many people swear they cannot live without — a daily latte, premium cable, a weekly manicure, a new leased automobile and cell phones for the family.” … [...]
My simple suggestion is get rid of your credit cards COMPLETELY. Most of my problems were due to my credit cards and my infatuation with using them to buy shoes.
Very interesting post. A little bit confusing, but it still ok Hm