David

Thank you so much for linking to my post! I hope that I have offered a perspective on this issue that will be useful in some way to your readers.

Keep up the great work with the blog!

I plan on coming back to the Mesquite Branch in the month of May. Please keep a watch in the classes section for time, date, and topic.

Thanks for the read…

- Phillip

Although I’m not sure about these statements:

Sometime during elementary school, kids are taught the true definition of a need and a want. At this age they accept what they have learned at face value and do not question this lesson. The lesson holds weight since responsible parents provide their primary needs for them. The child usually makes very few decisions on how they spend their money.

As people gain freedom to make their own choices on how they will spend their money with age, people tend to forget or simply ignore the lessons learned early in life.

I do think a person needs change as they age and definitely believe having access to more capital and more influence over decision making makes a difference in a person’s spending.

It seems to me, individuals who have goals tend to fair better when it comes to smart spending. I also think they tend to have more discipline and will power when it comes to saying no to “wants.”
For example, I know several young people who are saving for a down payment for a home that are very frugal.

Thank you for the thought provoking article. Have a super day!

Sam X Renick
Author, Founder, CEO, Social Entrepreneur
The It’s a Habit! Company, Inc.

“Award Winning Financial Education Tools and Programs for Parents, Teachers and Trainers”

http://www.itsahabit.com
http://www.sammyrabbitblog.com

In class, I try to demonstrate the difference between needs and wants by showing how I make daily choices about where I get my coffee – the free coffee in the breakroom at work, the coffee I make myself at home, a McCafé at McDonald’s, a fancy latte at Starbucks, or nothing at all. The same can be done for all choices – our housing choices, our choice of transportation, clothing, shoes, gym memberships, cable TV, sports and entertainment, etc.

Some very eye-opening stories I have heard lately are about the couple who lost their jobs and not only committed suicide, but murdered their five children and about the counselor who speaks to suicidal people who are contemplating a life in unemployment or the alternative (as they see it):
With no job and 5 kids, ‘better to end our lives,’ man wrote – http://www.cnn.com/2009/CRIME/01/29/family.dead.california/index.html
Economic troubles bring many to the brink – http://www.cnn.com/2009/HEALTH/mentalhealth/01/28/economy.mental.woes/index.html

Not all situations are this dire, of course, but human beings are creatures of habit. Sometimes, we just need to be reminded of the consequences of our habits. Sometimes, we need to see the long-term effects, and we really need to see them before it’s too late. If it is “too late,” we need to know there’s hope available. One antidote is habit-changing, daily reminders. Another is awareness. This is how I see my job – to be the spokesperson for financial awareness. I’m glad I’m not the only one, though, because that would be too much for me. I also never lead anyone on to believe I am perfect and always choose the free coffee or none at all. Some days, I just can’t help myself. But I am aware of my choice when I make it, and that makes a difference.

To clarify, Phillip, your hypothesis is based on perception, not reality. So, while I don’t disagree that most people perceive there to be only gray, there still remains, in reality, only black and white. But, human beings don’t live in black and white.

Thanks, Phillip for all your hard work to bring financial education to the forefront at all times, but especially now when our society clearly needs it most.

“Needs versus wants” is a subject that many professional sales people and scholars have studied. I recall a presentation by Zig Ziggler on that very subject. He says that, in general, people buy what they want not what they need. He sites several stories about his early days in sales and how he learned the lesson of needs versus wants. One story I remember him telling was about visiting a family to sell encyclopedias. He states that we worked and worked to make the sale. The family had several school age children and in his opinion really needed the encyclopedias to help them with their studies. In this story he speaks about being persistent too, but that’s another story.

Anyway, he did not make much progress with selling the encyclopedias and was loading his sales materials in his salesman’s suitcase preparing to leave. In so doing he took out a sample book of cookware, which he also sold. The woman of the house noticed this and stated—“Do you sell cookware? I’ve always wanted a set of good cookware!” Well, that was that. He sold a set of cookware valued much more than the encyclopedias and with allot less effort. From that point on he began to learn more about needs versus wants and how to listen to people and understand their motivation for buying.

He tells another story about how many shoes do you really need. Which I have shared with my wife, but somehow it doesn’t do much good. I agree with your hypothesis and so does my wife when it comes to buying shoes–The end result is that “wants and needs” do not differ enough with people when they get older and have a source of credit.

– Lee Alewine
America’s Credit Union

- Phillip