The Things We All Need

I need this. Really! Image from green.autoblog.com

If you have kids and gone for a stroll with them at the supermarket, you'd notice how they use the words want and need. I think, in their brains, they know the impact of each word. Saying "I need this" vs "I want this" has its own weight. So, "need" will come up more often than "want". I barely can resist their puppy eyes and mellow voice as they longingly look at the toy that has been strategically placed eye-level with seated shopping carts.

Maslow's Hierarchy of Needs

Maslow's hierarchy of needs breaks down needs into three parts; basic needs, psychological needs, and self-fulfillment needs. Basic needs are the foundation of the triangle, consisting of physiological and safety needs. Physiological consists of food and water. Safety needs, like shelter. The psychological needs are love/belonging like friendships and esteem for feelings of accomplishment. The last part is self-actualization, fulfilling one's potential.

Maslow's hierarchy is a perfect formula for marketing purposes. For example; A commercial showing a boy waiting in hunger as he licks his lips while he watches his Mom make a peanut butter sandwich for breakfast. The boy finishes his breakfast then heads off to school for a test, A+! The boy returns home to see his Mom very proud of her son's achievement, giving him a great big hug. Meaning, advertisers/marketers try to make the item attractive physiologically (hunger, then leave for school feeling full from the peanut butter sandwich), a feeling of love, safety (mom's hug), self-esteem, and sense of self-fulfillment. So, within these needs, companies are trying to categorize or push their products as the I-need-to-haves. I need to have all (physiological, safety, love, esteem, self-actualization) that, just from a jar of peanut butter.

Step 10, is all about identifying needs, wants, and prioritizing. What are our financial needs and wants? Using Maslow's hierarchy of needs, we start from the foundation; our basic needs, the need to eat, drink, sleep safely in a home and so on. We should start tackling down things that might harm our basic needs, debt. We should prioritize to repay any debt on time, because it may harm the very foundation and basic needs. A mortgage, car loan, consumer debt. If we don't have a home, save for a down-payment.

The second is psychological, the need for happiness. Plan for a refreshing trip to the beach, watch a good movie, buy a book that you will enjoy reading accompanied with hot cocoa on a rainy day, and things that will give you positive experiences. Also spend on others, giving out to charities so that you will become much happier. Being happier will help you in avoiding foolish money decisions. Those who withhold from giving (productively) are only withholding themselves from happiness.

"Here you are - those invited to spend (what Allah has provided) in the cause of Allah - but among you are those who withhold [out of greed]. And whoever withholds only withholds [benefit] from himself; and Allah is the Free of need, while you are the needy. And if you turn away, He will replace you with another people; then they will not be the likes of you." 

Surat Muĥammad 47:38

The final part, self-actualization, is supported by our actions from the foundation. We believe in our abilities and will fulfill our potential to make the right financial decisions and goals.

We will continue next week for step 11 in setting SMART financial goals.