What You Need

If you’re serious about planning your spending, one of the first things you’ll have to do is to separate needs from wants.

Needs are things you can’t live or work without. Needs include a place to live, food, transportation, clothing, and insurance. Loan payments belong in this category, too. Regardless of what you borrowed money for, you need to pay it back. Otherwise, you’ll risk ever-increasing interest costs and fees, and maybe even going into default.

Although you have to pay for needs, you do have some control over what you spend. Consider the following ways you might be able to save money on needs:

• Bike to class instead of driving.
• Learn to do some basic cooking instead of eating out or ordering in every night.
• Cut back on options in your cable service or mobile phone plan.
• Save on your electric bills by not running the heat or AC on full tilt all the time.
• Consider getting a roommate.  As nice as it may be to have a place of your own, a roommate foots half the bill.
 

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