24 Nov Why You Keep Buying Crap You Don’t Need (And What To Do About It)
5-Year Old Johnny Screaming In Crowded Shopping Centre Just Before Christmas: But Mummy, I want this toy!
Stressed Out Mother: No Johnny, you already have so many other toys at home!
Johnny: Mummy, I NEED this toy!
Mother: No! You do not NEED this toy!
Johnny (chucks a massive tantrum on the floor)
Mother (internally thinking “$30 seems pretty cheap for a quiet ride home”)
Okay, so the last few lines above kind of changed the point of this story, but you get the idea.
Whether you are aware of it or not, you are constantly facing a battle between needs and wants.
This leads us to the important question:
What is a need and what is a want?
Needs are defined as goods and services that we cannot live without.
For example, we cannot live without food, clothes, a home, healthcare, education and different forms of transportation.
Without these basic needs being met, we genuinely live a life that is substandard (think third world).
On the other hand, a want is a good or service that we do not need but that we desire or wish for.
We could easily live without our “wants” but there is a desire within us that wants to buy it.
This seems straightforward enough, doesn’t it? Unfortunately, the distinction between need and want can be quite blurred.
And it is easy to blame advertising for this.
The role of a marketing team to convince you (the customer) that their product (generally a want) is something that you need. These differences can be subtle, but that is all they need to be.
For example, your child does need food, but do they really need McDonalds?
You do need clothes, but do you really need that Zara coat to find true fulfilment?
You do need a form of transportation, but is an expensive new Porsche what you really need?
How are marketers so successful in doing this? Usually because they are not selling a “product”, they are selling a “feeling”.
McDonalds is selling to our kids that their product is fun and joyful, hence why they keep putting toys in happy meals.
Zara is selling that if you buy their product, then you will feel beautiful and confident.
Porsche is selling that if you buy their car, then you will feel powerful and attract all the ladies!
Marketers play to our emotions. They make us think that we NEED this product to make us feel joy, confidence or beauty.
You could have noticed that every time you feel like you NEED something, you need it NOW, no matter what it takes to get it.
You know how the story goes from here don’t you?
You buy the product, get that initial feeling of happiness, then the product gets put into the cupboard or garage not to be used again.
You open the cupboard/garage up six months (or in some cases, six minutes) later and go, “why did I buy this?”
The reality hits in that you have just wasted money on crap you do not need. You turn on the TV and the first advertisement is your favourite shoes that you must need are on sale for 40% off…
The cycle continues.
Listen, it is very difficult to not buy the crap that we don’t need. Our everyday lives can be somewhat mundane.
We go to work, we go home to our partner and kids and somewhere in between we try and eat healthy and go to the gym.
We do this five times a week, clean the house on the sixth and recover on the seventh. Rinse and repeat.
All of us need a bit of excitement when it comes to our day to day lives.
This may come in the form of a holiday, daring adventure, food and yes even impulse buying, to bring out that wild side in us (it seems super lame that eating a block of chocolate brings out our wide side, but you know what I mean!)
This excitement often leads to regret because at some level we know we shouldn’t be doing this.
We know that is wrong, because from childhood, we have been told we should only get what we need, not what we want.
So what should you do?
I’m not your personal trainer, your fashion consultant (you do not want me as your fashion consultant trust me!) or your psychologist.
I am simply here to help you Master Your Money Now.
Whenever we talk about budgeting, we talk a lot about the difference between needs and wants.
It is important to make that distinction in a calm and stress free environment (a marketer free zone!).
There are two phases that we go through.
Phase one is for those who are in serious financial trouble. Those who are in credit card and personal loan debt and they can’t find a way out.
At this point, we get ruthless.
We go through all your expenditure and get rid of everything you do not need. Yes, I mean everything.
Pay TV is gone. Cars are sold. Holidays are no more. Garage sales and selling on eBay gets talked about frequently.
We get ruthless, because we need to be.
Unfortunately, that is what a lot of people think a financial planner will say and start subconsciously thinking that all we are is the fun police.
They don’t realise that there is a phase two.
Phase two is for those who have their finances under control. They may have a mortgage, but there is no car loan or credit card debts. They are saving a bit of money and building some wealth.
We would encourage these sort of customers to start setting aside money for something they really want.
This may be the holiday, or the car, or the fancy new dress.
But it has to be done in the right way. It cannot be a “rash decision” or an “impulse buy”. We have to set a clear link between reward and effort.
We want you to live a life that is beyond just the “bare basics”. We want you to live a life where you and your family get what you really want.
What is the point of building up wealth if you can’t enjoy it?
Numbers in the bank account don’t make you happy.
By all reports you can’t take your money with you when you are dead!
The marketers are somewhat right, you do deserve what you want. But you have to ensure you are setting money aside each week in your budget for what you want.
If you are spending the money you have set aside for what you want, there is no guilt attached to it! After all, you have earned it.
You get all the joy, confidence and happiness in getting what you truly desire without any regret.
Isn’t that what you really want?
If this is a topic that you would like to discuss in more detail, please go to www.MasterYourMoneyNow.com.au/getstarted to book in your complimentary 30 minute strategy session.
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Disclaimer: This information is general information only. You should consider the appropriateness of this information with regards to your objectives, financial situation and needs. Past performance does not guarantee future returns.
Chris Carlin is an Authorised Representative (No. 1235031 for financial services and No. 514748 for credit) and Master Your Money Now Pty Ltd ABN 65 627 229 681 is a Corporate Authorised Representative (No. 1265677 for financial services and No. 514747 for credit) of Infocus Securities Australia Pty Ltd ABN 47 097 797 049 AFSL and Australian Credit Licence No. 236523