You need many things in life including food, shelter, clothing and education. Needs are those things that you cannot live without or that living without would cause hardship and distress. Knowing whether something is a need or a want is important since your perception will determine whether you spend your money on it or not.

There was a time — not so long ago — when there were no cellular phones or e-mail — and we managed, just the same. New technology is created to make things easier and enhance the quality of your life. But technology doesn’t eat a hole in your wallet or put you into debt — you do that when you choose to purchase things you cannot afford.

Many people feel they deserve to “treat” themselves to expensive items or spend money they don’t have on living a lifestyle they have yet to earn. They charge these “rewards” on a charge card. But there are costs for borrowing money, besides the fees and the interest, you experience the stress of being in debt and you are living a lie. And yes, you still need to pay the money back for those expensive things that you purchased.

As you know, companies use advertising to market their products. The role of advertising is to create “needs” for the things that you “want” which influences purchasing behavior. It’s your job to decide whether each new product is something you really need, something that will make your life easier or add to the quality of your life or, whether it’s something you can continue to live without.

The amount of money you have to spend is finite; everything in life is a trade off. If you are going to spend your money on one thing today then this becomes money that is not available for saving or for purchasing more important items in the future. Just as you prioritize your time, learn to prioritize your spending. Before you make a purchase, ask yourself whether the item is a need or a want and decide accordingly.

Identify your spending habits by writing down every dollar you spend for a week or two. Identify how much you’re spending, on what and where your money is going. Eliminate all unnecessary spending such as excessive bank fees or fees on credit cards, late payments and wasteful purchases. Return items you will never use. Examine every bill you pay; is there any way to lower your bills — perhaps eliminating a luxury item?

Put money back in your pocket by identifying areas to cut back. Our clients have found hundreds of dollars that they were able to cut back — a week! Make a game of it and include those in your family.