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Paycheck Chronicles

What Are You Willing To Give Up?

You've got to pick and choose what is really important to you.

n the personal finance world, there's a lot of talk about distinguishing between wants and needs.  And it's a super-important discussion, because the definition of need has definitely gotten warped in some people's mind.  We almost all have things that we consider needs, that are actually wants.  (Like my new dishwasher that is super-duper quiet.  Not a need!)

Regardless of whether they are a need or a want, there's another side of the discussion that must be addressed:  what are you willing to sacrifice for that need or want?  For some things, it's a simple exchange of money for the item, service, or experience.  For other things, compromises need to be made.  As super-smart blogger Paula Pant says, "You can afford anything...but not everything.  What's it gonna be?"

It could be housing, or education, or cars, or anything really, it doesn't matter the item or category.  The fact is, most of us have a finite amount of resources.  With a limited amount of money, and a limited amount of time, fulfilling a want or need almost always means giving up something else.

Some "giving up" is easy.  I've never wanted to own a boat the size of Johnny Depp's, so it's easy to earmark that money for retirement savings.  Fancy cars aren't my thing, so I don't mind that I don't have a fancy car because I'm paying two college tuitions.  Other compromises are harder...I keep my house cold in the winter, to keep our utility bills low, so that we have money for family fun.

I often talk to young families who are living paycheck-to-paycheck, but a large portion of their budget is going to a single item that's not essential.  It's often transportation - by the time you add up car payment(s), insurance, fuel, registration and sometimes taxes, a family might be spending half its income on cars and associated payments.  There's nothing inherently wrong with that, but if you can't figure out why you're out of money four days before you're out of month, and you're spending that much on your cars, then you have to figure out what else you're going to give up.  But obviously it doesn't have to be transportation.  It might be dip, or a certain brand of leggings, or eating out.  If those things are important to you, fine.

But what are you going to give up to afford them?

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