Needs vs Wants

[DangerMouse]

Wondering how people maintain the balance between their needs vs wants.

For example, like Laurence last week, this weekend were nearly dazzled by the beauty of a house. We were close to making an offer on a beautifully renovated 4 bed/2 ba house in one of our desired locations for retirement in Australia. However, what pulled us back from the brink was realising how it would impact our retirement plans. We were quickly blabbing about doing one more year, or changing to working x amounts of months to subsidise the mortgage. We did come to our senses and withdrew from the process. However, when we start looking at lesser houses we feel so depressed. The depression comes from the ugliness of what we are seeing at the cheaper prices combined with we have how much and that is all we can fford? The crazy part is this was not our dream house and we know that we could buy something that needed renovating and get it exactly how we want it.

Our financial calculations all show that we are better off financially if we rent rather than buy, but emotionally that part of me wants a house where we can put all our "stuff" we have accumulated over the years. One can argue to get rid of the "stuff" but some of it we are rather fond of. We know that when we die no-one will be fighting over these things that seem so important to us, all they will care about is the money.

 

[haha]

We know that when we die no-one will be fighting over these things that seem so important to us, all they will care about is the money.

A depressing thought, and IMO not necessarily true. I use my parents wedding silver almost every day. I frequently wear my Dad's diamond ring the stone of which was his grandmother's wedding ring when she was married in 1875. I drink wine from crystal that was my grandmother's. I have albums of family pictures, which recall many memories for me. I even have a conch shell that my grandfather brought home from a stay in Cuba before WW2.

Stuff is not all junk. It can get to be too much, but it has historically been associated with a higher level of culture.

ha

 

[macdaddy]

This is a tricky question. I feel like some people on this forum push FIRE at all costs. Especially if you RE, you have many years ahead of you. If you think you would be happier in the nicer house, then maybe it is worth it to stay at work for an extra year... or transition to part-time... maybe this depends on how tolerable your jobs are. Would you rather live in the nicer house and take 2 trips per year, or live in a shabbier house and take 4 trips per year? Everybody has different priorities.

 

[MasterBlaster]

Needs versus wants, Needs versus wants, Needs versus wants, Needs versus wants...

You actually need very little.

In order to evaluate if a want is worth it you need to do a "your money or your life" kind of thing. And that is to weigh how much pleasure the thing is that you want versus what you will give up for it. Often what we give up is our time spent at a job. So do you love the house more than you hate your job. Or at least to you love the house more than the extra time you could have spent not working. So do a little evaluation on yourself to convince yourself one way or the other what the right way to go is.

There is no right answer here. Is it worth it to you. That's all that matters.

 

[haha]

I think it is bizarre to pare one's life down to bare needs. That is called poverty, no matter how money you might have in the bank.

Ha

 

[ats5g]

Wondering how people maintain the balance between their needs vs wants.

For example, like Laurence last week, this weekend were nearly dazzled by the beauty of a house. We were close to making an offer on a beautifully renovated 4 bed/2 ba house in one of our desired locations for retirement in Australia. However, what pulled us back from the brink was realising how it would impact our retirement plans. We were quickly blabbing about doing one more year, or changing to working x amounts of months to subsidise the mortgage. We did come to our senses and withdrew from the process. However, when we start looking at lesser houses we feel so depressed. The depression comes from the ugliness of what we are seeing at the cheaper prices combined with we have how much and that is all we can fford? The crazy part is this was not our dream house and we know that we could buy something that needed renovating and get it exactly how we want it.

Our financial calculations all show that we are better off financially if we rent rather than buy, but emotionally that part of me wants a house where we can put all our "stuff" we have accumulated over the years. One can argue to get rid of the "stuff" but some of it we are rather fond of. We know that when we die no-one will be fighting over these things that seem so important to us, all they will care about is the money.

Pretty simple actually. When she we decide she we want something [car, kitchen], she we hold of on it for a week, unless it is something we really need [groceries, medicine, etc.]. After thinking about it a bit, she we always seem to find better uses for the money - like paying down debt. It also allows her us to see if we can really afford it. It's usually me saying "And how are we paying for this??"

Seems to me like a lot of people think about buying their first house like they think about having their firts kid - they always focus on the very best aspects without really giving the entire process/committment a review.

For example, one of my coworkers was thinking about having a kid and I asked "Do you mind getting up 2-3 times a night for a couple of months?" "You just might have to teach the kid how to sleep, eat, walk, talk, pee, behave, etc." I got a blank stare as if to say "You mean the kid doesn't already know how to do that?"

Likewise, people could try asking "Exactly who am I going to call when [X] happens to my house?" Or "How do I know when [X] needs replacing/fixing"

Ahh, nothing like "the practice" kid and the "practice house."

- Alec

 

[MasterBlaster]

I think it is bizarre to pare one's life down to bare needs. That is called poverty, no matter how money you might have in the bank.

Ha

I don't agree with that. What I think though is that given your resources, spend your money on the things that make you happy and the things that make life easier.

If you want a car, for example, then make the trade-off between working an extra year (or so) and having that car.

So it doesn't mean go live in poverty, it means work for what you really want and skip all the fluff in between.

 

[haha]

I don't agree with that. What I think though is that given your resources, spend your money on the things that make you happy and the things that make life easier.

If you want a car, for example, then make the trade-off between working an extra year (or so) and having that car.

So it doesn't mean go live in poverty, it means work for what you really want and skip all the fluff in between.

It appears to me that we are in agreement; you may have misunderstood my meaning. Of course people should spend on whatever floats their boat. I just feel that least some of the more extreme cheap-livers might wake up one day and wonder what they have accomplished in life, or if they might have had a more meaningful and pleaasnt ride.

Sometimes when work sucks it is better to get a more appropriate work fit, than to put your head down and work mainly to get out.

Ha

 

[DangerMouse]

I am not a hoarder by any means, and none of my stuff is of the expensive variety, rather it's the type that brings back fond memories of places that I have been. Whenever I have travelled I have tried to buy something of use, nothing a little dust collecting thingy. i.e. when I was in Spain I purchased a hand painted butter dish which I use, fruit bowls etc. For DH it is more difficult as much of his was inherited from a favourite uncle.

Our big dilemma is we are childless and there are no children on DH's side. There are no close relatives who will be interested in his family belongings. On my side there are 8 nieces and nephews but at this time not one of them has come forward as a likely candidate to inherit our stuff or the money that goes with it.

We are not working on accumulating any more stuff, and there is no way we could live in a 1 bedroom apt. just so we could retire 5 years earlier. We do want quality of life, we are homebodies so to me I get so much satisfaction of waking up in the morning and enjoying seeing a house I love. I don't want a McMansion, but a house that provides enough space and it pleasing to our eyes. It may be shallow, but that is me.

 

[Khan]

I just feel that least some of the more extreme cheap-livers might wake up one day and wonder what they have accomplished in life, or if they might have had a more meaningful and pleaasnt ride.

I do not have all I ever wanted.

I do have all I am going to get.

That is sufficient.

 

[Spanky]

Other than food and shelter, everything is wants. However, in order to secure food and shelter, we also need transportation (i.e., car, insurance), clothes, education, skills, ... $$$.

 

[Sam]

Other than food and shelter,

and basic medical care?

 

[macdaddy]

We do want quality of life, we are homebodies so to me I get so much satisfaction of waking up in the morning and enjoying seeing a house I love. I don't want a McMansion, but a house that provides enough space and it pleasing to our eyes. It may be shallow, but that is me.

I think you've answered your own question then...

 

[brewer12345]

I do not have all I ever wanted.

Me neither.

"A million dollars and three Hawaiian islands. Good ones, not the leper ones."

 

[lazygood4nothinbum]

i'm not real into the lalaland follow your bliss mentality but i am into minimizing suffering and maximizing happiness. so i guess you just need to follow your bliss.

 

[dex]

this book answered the question for me many years ago

http://www.amazon.com/Handbook-Higher-Consciousness-Ken-Keyes/dp/0960068880

 

[kcowan]

Dex that is a great reference work for this topic.

One of the phenomena that I observe is that wants, once fulfilled become needs. I wanted Cruise Control, now I need it. I wanted heated seats, now I need them, etc.

I wanted a Jacuzzi Tub, etc. In 1995, I turned my life upside down and started to downscale my needs. Part of this was because once you have experienced many of your wants, you realize that the anticipation of them is better than the actual experience of them. Like anything, you tend to take them for granted after a while.

So when all my friends rave about the benefits of wide-screen HDTV, I marvel at how well our 1998 32 inch Toshiba is holding up and how much netter it looks with a digital feed. I would rather spend $2000 travelling.

I still like heated seats though...

 

[tricky88]

Dangermouse - I have a question about this line of your original post:

"Our financial calculations all show that we are better off financially if we rent rather than buy, but emotionally that part of me wants a house where we can put all our "stuff" we have accumulated over the years."

I take it you live in a very expensive area as far as real estate goes. How did you calculate and arrive at your calculations that it's better to rent? We live in Los Angeles, and our rent isn't terribly high - we like the neighborhood - but we feel like we should buy our own place. Doing so though would at least triple the amount of money we put towards shelter each month, it would drastically limit the amount we save and invest each month, and it would take up a big chunk of our existing savings to make the 20% downpayment.

We just looked at a nice townhouse near our apt. It was $620,000, and that price actually seemed "reasonable" compared to the last 2 years of prices we've seen.

I know your post went far beyond this part, but I'd be curious what your thoughts are of renting / buying in a very expensive area.

 

[Sandy]

We do want quality of life, we are homebodies so to me I get so much satisfaction of waking up in the morning and enjoying seeing a house I love. I don't want a McMansion, but a house that provides enough space and it pleasing to our eyes. It may be shallow, but that is me.

This is the answer to your question. I wouldn't call it shallow. This is how you enjoy your life and the results of your efforts. You may need to take more time, assess the homes available at the different price ranges. As you look at them and do the YMOYL internal dialogue (and with your spouse), the type of house and price that is best for you will become clear.

 

[Khan]

I wanted a Jacuzzi Tub, etc. In 1995, I turned my life upside down and started to downscale my needs. Part of this was because once you have experienced many of your wants, you realize that the anticipation of them is better than the actual experience of them. Like anything, you tend to take them for granted after a while.

"After a time, you may find that having is not so pleasing a thing after all as wanting."
--Spock
(Amok Time)

 

[shiny]

This is the answer to your question. I wouldn't call it shallow. This is how you enjoy your life and the results of your efforts. You may need to take more time, assess the homes available at the different price ranges. As you look at them and do the YMOYL internal dialogue (and with your spouse), the type of house and price that is best for you will become clear.

Yeah, I don't think it is shallow either DangerMouse. Having a nest with things that you treasure seems very fulfilling.

We are entering a phase of our lives where we are getting rid of things we've had for a long time - useful things, but not cherished things. I feel good (if a bit overwhelmed) by it. We'll live overseas and travel for a while, but after that we really hope to find a small home and have only things that we truly like. I think that will just be great.

 

[haha]

I take it you live in a very expensive area as far as real estate goes. How did you calculate and arrive at your calculations that it's better to rent? We live in Los Angeles, and our rent isn't terribly high - we like the neighborhood -but we feel like we should buy our own place. Doing so though would at least triple the amount of money we put towards shelter each month, it would drastically limit the amount we save and invest each month, and it would take up a big chunk of our existing savings to make the 20% downpayment.

We just looked at a nice townhouse near our apt. It was $620,000, and that price actually seemed "reasonable" compared to the last 2 years of prices we've seen.

I know your post went far beyond this part, but I'd be curious what your thoughts are of renting / buying in a very expensive area.

Not Dangermouse here, but I would like to comment on your question. I take it that it is the monetary aspect that concerns you, not the emotional one.

Implicit in what you say is that you are afraid of being locked out of the market, or losing out on appreciation. I think it is a complicated question, because the correct answer depends entirely on the assumptions you make about appreciation of the home that you might buy and escalation of rents if you don't buy.

In a way, you are forced into speculating-since a decision to rent is a speculation that rents will not escalate rapidly. And a decision to buy is a speculation that price appreciation of the home will pay back with interest all the extra cash you are laying out each month.

IMO, no pat answer. If it were me, and I was absolutely committed to staying in LA, I would probably bet that prices will come down more, but be looking for that chance to buy the place I want.

If moving to a cheaper area were a possibility, then I might just stay with renting.

Ha

 

[chinaco]

Several years ago, we were in the process of working out a deal to build a large custom home. Long-story short, we stepped back and decided it was too much... although we could afford it.

We actually bought a lesser house that is still very nice. I paid to finish the walkout basement and put a pool table, foss ball table, bar, It has a fire place leather furniture. I also setup a room for a Big Screen TV with Surround sound. We have about 3400 Sq ft.

Bottom line, it is more than we need. We will sell and get a smaller place in a few years.

Our previous house was half the size of our current house and it met our needs.

We bought what we thought we wanted... Found out we really want less. Our needs are probably even less.

We found that we would be perfectly happy with having our needs met with less house.

 

[DangerMouse]

I take it you live in a very expensive area as far as real estate goes. How did you calculate and arrive at your calculations that it's better to rent? We live in Los Angeles, and our rent isn't terribly high - we like the neighborhood -

I know your post went far beyond this part, but I'd be curious what your thoughts are of renting / buying in a very expensive area.

Probably our situation is different from yours. We will be eventually living in Australia where there is no deduction for mortgage payments, so removing the tax advantage alters the difference significantly. However, we do live in an expensive area in the US, San Diego, and we decided some time ago not to buy here because we felt we would resent paying the outrageous amounts demanded for cookie cutter, poor quality, unimaginative, square boxes built on top of each other. We pay a lot in rent, but enjoyn our surroundings and it's great not having to come home and do yard work etc.