Needs vs Wants

UTAR Talk2 weeks ago, I was invited for a breakfast talk at Universiti Tunku Abdul Rahman, Petaling Jaya to share with the public and students to cultivate the good financial habits. Some parents shared with me that they were deeply concerned with their child spending habits. The younger generation are spending beyond what they could afford (or spend beyond their means).

You may be wondering why young people falls into excessive spending habit? The common reason is because many young people were brought up from a well to-do family, and they were not taught to differentiate between Needs and Wants. Needs is something that you can not live without, else you will die. Wants is a wish list. For instance, to fulfill our desire with good food, we can have a decent meal in a Kopitiam/Hawker Centre. However, some people choose to have it in a high end restaurant. Instantly the food bill goes up few folds. You may not know that – you are helping the owner to pay for the restaurant’s rental and renovation cost.

In this new information age, we must admit that we could not live without a mobile phone. Otherwise, we will feel handicap the whole day until we have the phone back on our hand.  Thanks to the seductive advertisement on Internet and media TV, everyone started to debate whether to get the new iPhone 5 or the new Samsung Galaxy 4. You could be very tempted to get a new smart phone and get rick of you current one which is still in very good condition. Before you do that, have you ever ask yourself whether do you really in need to change a new phone? Do you need a much faster processor and access to many apps, or you just want to look cool in front of people?!! How you want to live your life is entirely on your own, you can choose to live an extravagant lifestyle now, but an empty shell when you are old; or you can choose to live modestly and accumulate enough wealth to enjoy your life when you retire.

A friend of mine is a young and successful businessman. He used a 2G mobile phone. He shared with me that he loved his phone because the phone’s battery life can last much longer and the phone can do SMS. He always tell his kids to spend money on something that will appreciate in value and not something that will depreciate in value.  What differentiate between the rich and the poor one is because the rich understand delay gratification. So, start scrutinize your spending habits and spend wisely.

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