Do You Know The Difference Between A Need And A Want?

Knowing the difference between a need and a want is what often separates a person with credit card debt from a person who has no consumer debt

. In this time of an unsettled economy, not everyone got into debt because of buying things they did not need. Some have had to finance ordinary expenses with credit cards. But even in a lot of these cases, they are using credit cards because the necessary emergency funds were not saved for times of unexpected expenses and unemployment.

If you take the time to evaluate whether you really need something or whether it is just something that would be nice to have, you should never be in a position where you do not have the money to pay for the things that you really need. If you buy based only on need until you are financially stable, you will have an emergency fund that will sustain you even if you become unemployed.

But even if you do not have an emergency fund and you have credit obligations, does not mean that you cannot eventually be financially stable. You just have to make some changes and today is the best time to get started. The first thing you have to do is stop charging and even if you have the cash, you should be asking yourself if what you want to purchase is something you can live without. If it is, your purchase is probably a want and not a need. In this case, you should consider adding the money to your emergency fund and foregoing the purchase.

Buying everything that you want can hold you back and will most likely lead to consumer debt. It is important to stick to purchasing only necessities until you have no credit card debt and 6 to 8 months of monthly of expenses saved in an emergency fund. This may seem like a lot, but if you become unemployed, you will be glad that you have it. Holding off on satisfying your urges to buy everything that you want will allow you a life most people dream of later on.

by: Marjorie Salada

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