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One Unorthodox Money Mentality Shift For Longterm Financial Health


Call me a snowflake. Call me an emotional woman. Tell me I don’t understand money because I would rather talk about money mentality (or these pesky feelings, beliefs and values) than primary school maths.

Personal finance gurus tell us that our money destiny hangs in the balance between how much we earn and spend.

They tell us that our financial health depends on whether we are money management ninjas or our budgets are about as helpful as a bottomless bucket.

But here is the thing.

Our mentality – feelings, beliefs and values – defines our actions.

Now, let me ask you do you believe it is more important to satisfy your ‘needs’ or your ‘wants’?

Traditional personal finance will tell you to focus solely on ‘needs’ for optimal money management. According to this school of thought, ignoring any luxuries your heart may desire, or your ‘wants’, is the highway to the promised land of high savings rates and financial freedom.

Prioritise your needs and ignore your wants, is what they say.

At this juncture, I leave the highway of personal finance and take a scenic shortcut. You are very welcome to join me.

Prioritise your wants and let the needs take care of themselves, I say.

This unorthodox money mentality shift, from needs to wants, will help you achieve long-term financial health. It will enable you to leave the realm of boom and bust of saving and budgeting.

Because this is a shift from suppressing your desires to learning how to desire less.

There are two clear and immediate benefits from this money mentality shift.

First, we can optimise our spending and keep the joy in our lives. Our needs are inevitably rather simple and basic – we need shelter, food, drink (water) and clothing. There are other needs that occur from time to time – like the need to procreate. In our ‘needs’ we are very similar to any other animal, really – we need the things that help us stay alive but not necessarily make us thrive and blossom. What makes us human is not our ‘needs’, it is our ‘wants’ – our want for comfort, warmth, delicacies and love. What makes us human is our thirst for knowledge, joy and fun.

Second, we can reduce our spending, and consumption, without feeling deprived. Willpower is not a reliable companion on your money adventure. Suppressing our ‘wants’ often results in feeling deprived. By refusing ourselves what we want, we crave it more. Until the gates of our restraint break down and we succumb with wild abandon rather than controlled hedonism. Danger lurks in wild abandon – from over-eating to over-spending; from obsession to compulsion.

(And, of course, you must increase your income.)

We must understand our ‘wants’ to become money management ninjas.

I learn this the hard way. I used to have some wants that don’t come cheap. Like my craving for shoes (yep, I am really a cliché), electronics and jewellery. I had 42 pairs of shoes (and lived in two pairs of canvas shoes), three laptops and two iPods (and everything in-between), and a friend claims that my sons’ wives will be very lucky women referring to my jewellery.

Shifting my money mentality from needs and survival to wants and thriving helped me optimise spending, pay off a very large debt in record time and stay debt-free for a decade.

If we were to get out of the financial hole that the financial crash and long term irresponsibility got us in, this had to stop – no more shoes, gadgets and fancy rings. But my soul wept and my mind revolted. I tried ‘look after needs not wants’ thinking and decision making. I only wanted more and felt more deprived. Until I devised an exercise.

It is simple really.

  • Imagine yourself in a situation where you are told that you have to leave your house and will never come back. You are allowed to take with 20 items, have 20 minutes to pack and won’t be allowed to buy anything for one year.
  • Get a pen and a piece of paper and very quickly write down the 20 items you’ll take with you – it is important to do this quickly and without too much thinking about it; this is how you end up writing the things you want rather than the things you think you should have. That’s right: stop being so sensible! This is about ‘wants’ after all and if you feel like taking your six-inch heels with you so be it.
  • Once you have written 20 items it is time to start thinking: look at them carefully and decide which items you are going to take if you are allowed only 10; how about if you are allowed only 5?
  • Do you have your 5 items? Look at them carefully – these items represent your core ‘wants’; the wants there is no point trying to ignore or restrict because you will feel deprived.
  • Allow yourself to have these items: stand up, look in a mirror and give yourself permission to have them.
  • You are done – your wants will never trouble you again and you just became the master of your financial destiny.

I developed this exercise, completed it two years ago and never since then have been a victim of ‘wild abandon’ and all that comes with it. Still buy jewellery but now it is about controlled enjoyment.

Make this money mentality shift.

Become the master of your wants to be able to control your finances.

17 thoughts on “One Unorthodox Money Mentality Shift For Longterm Financial Health”

  1. Years ago, we were told that we may evacuate in a few hours  due to a fire.  Aside from clothes and valuables, we took pictures.  The things you cannot replace are important.  It is right after saving people.  Thankfully, we did not evacuate , but it was life changing.
    Our wants are pretty much under control and our needs are pretty low key.  I am more cocerned when the saving stops and I start spending in retirement.  I am trying to ease into it.

    • @Krant: So you have experience with it, uh? Glad to hear that you have mastered your ‘wants’ – and taking pictures makes sense (means you should not deprive yourself of them). Retirement will be fine – have you seen the calculator John designed? It help budget accounting for different variables (like assumptions of life, care etc.). May be worth playing around with it just to aleviate the concern a bit :).

  2. That is excellent advice and carries over into other facets of life. 
    I’m thinking of deciding to cut spending in order to change line of work.  I know people who are miserable in their work and say they ‘can’t’ change because they will lose their big cars or expensive holidays.  They are spending more of their awake time at work than driving their flash cars or jetting away on holiday.
    These are often the same people who told me I was ‘lucky’ to work for myself.

    • @Pat: Funny you should say this. I was just thinking whether similar approach will work about eating – let’s say imagining a table over-loaded with all kinds of food and making yourself go very fast for your top choices. Then we’ll know what we have to allow ourselves instead of being prohibitive and craving it. What do you think?

  3. I leaned a huge lesson here myself. I had a beautiful first floor apartment in Hoboken (across the river from NYC) and then Hurricane Sandy came and wiped out everything. While its a hassle to get things like a new couch, it’s actuall sort of a relief. I don’t need to carry around all that crap with me, I can start over. I also learned that I really need way less to be happy. 

    • @Listen Money Matters: You’ve done so well! Sorry to hear about your flat but at the same time you took away a positive lesson. And welcome on The Money Principle :).

  4. I agree that if you try to ignore your wants, you are setting yourself up for failure. The human mind only has so much willpower and motivation. My problem with this exercise is two-fold. The first is practical.  What constitutes as an item? Are my tools a single item? Are they three items (3 toolboxes), or are they hundreds of screwdrivers, wrenches, sockets, clamps, hammers, saws, screws, nails, and shop lights?
    The other is more emotional. Such exercises have the horrible, soul-sucking feel of minimalism to me. I like my stuff. People talk about packing things away and if you don’t use it for a month get rid of it. Well, almost everything I own is packed away right now and I miss it horribly. I like knowing that when I need a tool, or feel like watching a movie or reading a book, it’s available and accessible.

    • @Edward: Ha, ha! Trust you to make re-visit this whole thing (btw, John said he will also have a problem with his tools and his stuff). I think we can say that your tool box xounts as one object. The point is not that; the point is that if you are thinking of taking it your tools are really important for you and you should allow yourself to buy some from time to time – need them or not. Ironically, one of the effects is that you stop wanting badly to indulge because you know you can do it. As to missng your stuff – I know what you mean. But I am getting really wound up about the c*ap I have and keep and will use Joe’s approach to getting rid of it. A minimalst I am not, though.

  5. I would take my laptop and 4 items of clothing. OMG I am addicted to that little machine. Watching the animals has been very interesting, especially when we change something to their habits. They adjust for a day, then life goes on. No complications.

    • @Pauline: My computer was the top item for me as well. The exercise has different effects when done though; one was that I realise that I buy jewellery not so much for itself but because this was my way to store stories – so once I found other ways to keep my stories jewellery buying is under control. One of my top five items was soap – so, yes, cleanliness and comfort are important for me and backpacking is out. And so on….

  6. I think it’s wise to write up a list of wants and build a game plan on how you’re going to get there! I did and I’ve been sucessful at it!  

    • @SaveSpendSplurge: I have a ton of wants as well – this is how I got in the whole debt mess to begin with. But when we started paying it off, I decided that I’ll work on odentifying my wants and learning to control those (the exercise is key, I found). Everything changed. In fact there were things I found that were unexpected; changed: for example, I always bought jewellery and thought that the pieces I bought is what I can’t resist. Doing the exercise made me realise that it is not jewellery I like, it is the stories that I store in it. Now I write my stories: cheaper and more enjoyable.

  7. Really beautiful thoughts you have summarized here. One of the greatest article that can change ones life. There’s one word for your work only – ‘Awesome’ .
    Thanks for sharing such beautiful article with all of us. Hope you would like to share such thoughts again.


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