It’s important when creating your budget to understand what is a need versus a want. If you need to cut back then the wants are the first to go. However a recent survey of my generation revealed the needs are not really only the basics for survival (shelter, clothing and food).
Instead, 66% in this survey by Mainstay Investments indicated that shopping for birthdays and other special occasions is a need. If that seems outrageous, other surprising baby boomer needs include an annual vacation (50%) and professional hair color/cut (43%).
Wanting it All
As part of the first generation to think they could (and should) have it all we’re starting to seriously think about retirement if not already there. And it’s time to pay the piper. This has motivated me to focus on paying off debt so I can start seriously beefing up my retirement accounts.
David Stewart, financial psychologist, indicates that boomers in general never shifted from spenders to savers when hitting middle age. I can see why if we think dining out (38%) and weekend getaways (46%) are needs.
Catching Up
Thank goodness I am near the end of this generation so I have more time to prepare. Fortunately I’m not the only one making changes in their retirement strategies. Some might work longer while others might try phased retirement.
Another strategy is to retire to a smaller home or cheaper area and add the remaining equity to your retirement fund. Others are seeking the advice of financial advisers for advice on when to retire and how to live as comfortably as possible.
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I think we’ll be okay but I am with the majority of boomers who think internet (66%) and pet care (51%) are needs. What is a need in your budget that isn’t directly related to food, clothing and shelter?
photo credit: Roger Smith
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I read that article too, and I was shocked at what was considered a need. I think back to growing up, and we didn’t have much. However, we NEVER ate out, and there also weren’t any ‘weekend getaways’. People seem to think they always deserve a break or reward over every little thing. Well, life isn’t always going to be easy, and you just gotta live with it.
If my husband lost his job, the gym membership and travel soccer would be the first things to go, along with eating out. Vacation would be just heading to the local beach and maybe playing putt-putt golf. Sure, pinching pennies isn’t fun. But neither is losing your house.
Kris, I was surprised as well. I would expect those answers from our kids that were given a lot from the boomer parents :). We would cut back on a lot if I lost my job including premium cable, smart phones and more. I wouldn’t even consider a weekend getaway (unless it was staying with friends).
The fine line between a need and a want moves in a “slow creep.” I recall, as a teenager in the 1950s, noticing that the middle class was beginning to enjoy benefits formerly reserved for the rich. Like air travel, ocean cruises and boat ownership. And, still today, as the price of technology continues to drop, digital communications is becoming available to “all.” Bill
Bill, yes some things have moved from my want column into the need column. I consider basic cable and internet service a need. However, deep down I know it isn’t and that we could live without both. They would be the last luxuries we’d cut probably.
For my family, cable would be considered a need, not so much for me though.
Internet access would definitely be a need for me!
As for the other luxuries I’m not so attached. My family would disagree with me on some of them though, especially petcare.
Money Reasons, I’m with you. My husband watches TV while I’m on the net, lol. Petcare is definitely a need. We would give up a lot of other things before our pets.
Very interesting list. Would have to wonder what the correlation of the perceived definition of need is to the amount of time that the economic crisis drags on.
Carol, I think probably boomers are weathering it easier than other generations. Many of us have had our homes long enough that the payments are lower than rent. But, I’m sure for those impacted severely the definition of needs may be different than the rest.
Hi, Kay Lynn…
Yes, I think you’re right about most boomers having their home long enough that their mortgage payments are lower than rent. And most have enough equity in their home that they’re not “under water.” Those homeowners who are suffering the most are younger people, and also poorer people, who were “suckered” into home ownership by the insane “funny money mortgages.” Bill
Health insurance (I pay for my own, $438 a month)
Travel: Now that I finished my degree and have a flexible job, I want to visit family and friends (I get the best deals I can find)
Charitable giving: At least $120 per month to my church, various other charities depending on how much I can afford to give and what’s going on in the world (e.g., floods in Pakistan)
Help for family members: I send my 87-year-old aunt some money every time I get paid; I send cash or gift cards from time to time to two other relatives.
Massage! ‘Cause no machine runs for 52 years without some maintenance issues. 😉
Donna, I’m with you on the massage! Yes, I agree that giving is a need and I don’t remember seeing that on the lst.
Internet is definitely a need! lol. Especially for us bloggers!
I agree in today’s world it’s a need. However, there are free wi-fi spots for those that can’t afford it at home. I don’t know that it would be good long-term for blogging, but for less net-dependent people it works.
Call me crazy but I would say my need is being able to participate in social sports. It’s an unbelievable outlet for me, allows me to get exercise, and I strongly believe keeps my sanity. It’s also great for meeting people and socializing especially in big cities where it’s tough to get to know others.
Overall though, over the years, I’ve come to realize that a lot of what I thought were needs are really just wants. By being disciplined, you can really save a lot of money, often be way healthier, and ultimately happier.
Andrew, excellent points. What sport you select can have very different costs. Ice hockey would offer the benefits you mention but cost a lot more than an adult softball league.
It’s funny you mention ice-hockey because that’s one of the sports I try to play year round. It definitely is more expensive but I’ve rationalized it by the exercise and social aspect. I also play tennis which is on the other end of the spectrum assuming you have access to outdoor public tennis courts.
It’s amazing how easily we categorize wants as needs. We even go further and classify luxuries as needs! Many feel as though they are entitled to everything this world has to offer just because they were born – whether they can afford it or not!
As a society, we’re aided in moving our wants to needs by the advertising industry and by credit card companies. Bill
Bill, good point about the role of advertising. I don’t see as much now that we have a DVR but it’s impossible to escape.
So true. The more you have the more you want the saying goes. Lifestyle inflation is a big cause as well.
your article title drew me in. OK, hair color is a NEED!!! Have you seen my picture? I would look like the witch in little red riding hood without hair color!
Barb, it’s hard to believe you would look like any witch! Hair color isn’t a need for me, but pedicures are so we’re even!
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