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The traditional needs versus wants paradigm is what often makes budgeting sound as much fun as going on a diet. This not only creates a lack of motivation to follow through with your budget, but also leaves you feeling deprived.READ THE ARTICLE
The problem with a this-or-that budget: When Maslow’s Hierarchy is applied to money management, anything other than “basic survival needs” is labeled as a “want”. As a result, items under the categories of entertainment, social connection, dating, education, etc. are put to the wayside.
A better way: To make the concept of a budget feel less restrictive, a mindset shift to a “needs versus strategies” framework can help. Here, needs are universal and fundamental, covering five categories: Survival, Security, Love/Belonging, Esteem and Meaning.
An example: In the instance of your daily purchased cup of coffee, it might not be the coffee that’s a need, but the experience you have enjoying it with a friend. If this social connection is a need, consider how you might still fulfill that without buying a cup of coffee each day.
Budget with your head and heart: It’s not always about what makes the most financial sense. Contrary to popular belief, your emotions should be taken into consideration for every financial decision you make.