[vc_row][vc_column][stm_spacer height=”150″ height_mobile=”-100″][vc_custom_heading source=”post_title” font_container=”tag:h4|text_align:center|color:%233f3f3f” google_fonts=”font_family:Montserrat%3Aregular%2C700|font_style:700%20bold%20regular%3A700%3Anormal”][/vc_column][/vc_row][vc_row][vc_column width=”1/6″][/vc_column][vc_column width=”2/3″][vc_single_image image=”13724″ img_size=”large” alignment=”center”][stm_separator color=”custom” style=”style_3″ custom_color=”#0d97ff” sep_width=”200px” sep_height=”10px” sep_css=”.vc_custom_1571309810608{margin-top: 20px !important;}”][vc_raw_html]JTVCRElTUExBWV9VTFRJTUFURV9TT0NJQUxfSUNPTlMlNUQ=[/vc_raw_html][vc_column_text]Covid-19 has put budgeting skills to the test. Of the most valuable quarantine achievements unlocked, distinguishing between essential vs. discretionary spending is right up there with learning how to screen share sound on a zoom call. Here are the basics.
“Needs” are essential for you to be able to live and work. No-brainers for this category are housing, transportation, utilities and food, but what qualifies as a need can sometimes be blurry.
“Wants” are the things that make your life better, but you could survive without them – travel, entertainment, new shoes (when you have perfectly good ones in your closet), getting take out, and wine from the grocery.
It’s a hard truth that humans have a propensity to hold overly favorable views of their abilities, so you probably think you’re spending more on what you need than what you want. But start tracking your spending and you may see another story unfold.
 (Illusory superiority is described by Cornell University Psychiatrists further in this paper).
List your monthly bills and subscriptions, then one day at a time, record everything you spend either under wants or needs. Here’s a worksheet you can use to take a hard look at what you think you need. Are the expenses you categorize as wants more than what you’ve spent on needs?
At the end of the month, compare the total amount you spent on needs to your total income, and do the same for the list of non-essentials. How close are you to the recommended 50% of income for needs and 30% for wants?
If your current spending is disproportionate, there’s good news: You can make adjustments. Here’s a simple way to start:

  • Re- categorize. Take a closer look at what you’ve listed down. Some items you’ve noted as needs may actually be wants, or vice versa. Internet, which used to be a “want” because it fueled our home entertainment, is now a need during quarantine.
  • Trim spending on needs. The cost of your necessary spending isn’t always fixed. Call your telco to request a new phone plan or cable package; buy lower priced items at the grocery, or maybe your household can work together to lower your Meralco bill.
  • Trim spending on wants. Consider downsizing your desires if they’re taking over your budget. I know that those cookies you saw on Instagram will make you feel better on the day that you receive them, but making your own (for 1/4 the price) will be just as yummy, and so much more satisfying!

Being honest with yourself about what you actually need will help you prioritize your spending and find the money you didn’t think you could save. Remember – personal finance is a journey; take it one step at a time.  [/vc_column_text][vc_raw_html]JTVCRElTUExBWV9VTFRJTUFURV9TT0NJQUxfSUNPTlMlNUQ=[/vc_raw_html][/vc_column][vc_column width=”1/6″][/vc_column][/vc_row][vc_row disable_element=”yes” shadow_x_offset=”0″ shadow_y_offset=”0″ shadow_blur=”0″ shadow_spread=”0″][vc_column][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]