Want it. Need it. Have to have it.- Making smarter spending decisions.

I am a big fan of honesty so I am beginning this post with a disclaimer. I like to spend money. Yes, I realize that might seem to contradict some things in this blog but so be it. I love the smell and feel of new books. Yes libraries are fantastic, but some books just look so fabulous on my bookshelves. I like to treat myself to new clothes. I often find myself buying furniture or other furnishings for my apartment.

I am hoping to change some of these frivolous spending habits over the next year. I've already started a bit, as mentioned in previous posts, but to help me even more I have been trying to follow the mantra in the title to this post.

Want it. Need it. Have to have it.

Every time I pick up an item in a store or add an object to my virtual shopping cart I ask myself the following question: Do I want it, need it, or have to have it?

Every tangible item in our life falls into one of those categories. The new television I bought recently was something that I wanted. My new snow boots were something that I needed. My cell phone is something that I have to have. The same item could fall into a different category depending on the person. Some people could easily live without a cell phone. Since I don't have a home phone and my parents are resistant to e-mail, a cellphone is a necessity. It's the only way I can keep in touch with my family.

So, I propose that before we buy anything we should ask ourselves do we want it, need it, or have to have it. If we decide that yes, it is something we have to have, then it is a good purchase. We should not feel any guilt buying these items (assuming we buy only what we must have).

If an item falls into the next category, something that we need but not urgently, then we should resist an impulse purchase. This happens most often when we are in a store (or browsing on Amazon) and we see an item that we actually do need. For instance, snow boots. Living in Chicago, I need a good pair of snow boots for the winter. Rather than buy the first pair of snow boots I see, I should try multiple stores and look for the best deal. There is no shame in waiting for an item we need to go on sale. When we buy a "need" item at a good price, rather than on impulse, we have made a good purchase. Again, no guilt!

The third category is where most people, including myself, run into trouble. Want. It's a simple word, but can cause a whole lotta problems. Want can lead to debt, addiction, and a hollow feeling inside. Satisfying want is nearly impossible, but it IS manageable. Most easily by learning to be thankful for the things we already have. But want usually still clings on for dear life. So this is how I intend to manage my want.

I am using a reward system of sorts. Each month I will keep a list of things that I "want".  This can be anything from a book to a concert ticket. No matter how big or how small I will write the item on the list. The only condition is that it has to be something I want and could reasonably get. Sure it would be nice to have a private jet but that is more of a dream than a "want".

At the end of each month I will go over the list again. I'm willing to bet that most of the items will get crossed off after I've had time to think about it. I will look at whatever is on the list and add up the cost of those items. I haven't actually done this yet so I'm not sure how high that number will be but the plan is to allow myself a percentage of that total to spend on something on my want list. Here is an example: If my want list for January totals $1,000, I will allow myself to purchase something (or some things) from my list that cost up to 5% of the total. In my example that would mean $50. If your want list total is higher, you can lower your percentage.

The idea behind this being that I will still allow myself to satisfy some of my want, but because I am limiting my spending I will most likely only buy those things that I really, really want. After the month is over, the want list continues. Any items from the previous month stay on the list, thereby increasing my "want" total each month. And each month I will get a slightly higher allowance for my reward. In the end, I will still be saving a lot of money because I will only be purchasing a small percentage of the things that I want and would normally just buy without much thought.

So that's the plan. After a couple of months I will report back on how this system is going but I think it's very doable. Another interesting thing will be to see what the total will be for my want list in December, and to see how much money I will save by using this reward system.

If you decide to try this, let me know how it goes. It might need some tweaking along the way.