Amy Dacyczyn from The Tightwad Gazette:
Some people won’t abandon cable TV [when trying to get out of debt]. This may seem like a small point, but to me, cable TV is a sort of barometer. Anyone who is deep in debt and spends $25 a month for cable clearly hasn’t “gotten it.” A frequent excuse is that “we can’t afford any other entertainment, so we feel this one expense is justified.” Deeply indebted families should not only cancel cable, but might also sell their TV and use the time they free up for frugal activities or a money-making hobby. They must maximize their use of time to get ahead.
I love what Dacyczyn is saying here. Some people have come to see certain luxuries, like cable TV, as a necessity. Even in desperate financial situations, where people can’t pay bills or have huge debts, TV is one of the last things they cut from their budget.
Or, another example, the other day I was on a frugal blog and the woman writing it listed the gym under her necessities. “Health is important,” she explained. And she’s right, except that there are many ways to excercise without paying for a gym membership–take a walk, get weights from the thrift store, buy a jump rope, etc. The gym is not necessary for good health.
To be clear, there’s nothing wrong with luxuries. I have plenty of them myself–we all do. But if you’re deep in debt, or can’t pay your bills, or just want to buck up savings, the first thing you have to do is divide necessities (food, shelter, water) from extras. And the problem is that some people don’t seem to know what is and is not a luxury. We are so used to seeing extras as part of life that when it comes to getting finances under control, we keep paying for them even when we can’t afford them.
Here are a few luxuries people sometimes confuse with necessities:
Cable TV–As mentioned above, TV is an extra that can really add up. People regularly pay $1,200 a year on cable.
Cell Phones–Sometimes cell phones are a necessity, but judging by how much people pay for their iPhones, there are data plans and other extras that can be cut.
Pets–I would never tell someone to give up their pet, but some people take on animals when they can barely pay their bills. Even a little furry creature can be a luxury.
Soda/Junk Food–These things, while fun, are not part of the nutrition we need to live, and so are extras in the food bill.
Alcohol–Much like soda/junk food, alcohol is far, far from a necessity in life.
Gym Membership–As I mentioned, there are free ways to exercise.
Cars–Paying for two cars when you can get by with one, buying a gas-guzzler because it’s more fun or convenient, or leasing an expensive luxury car are all ways that a car (often a necessity) turns into a luxury.
What other luxuries do people confuse with necessities?