Plan for your wants

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Budgets tend to focus on needs--food, shelter, heat, light, transportation, and (of course) taxes.  They also provide for wants, but generally the smaller, shorter-term wants--cable TV, a magazine subscription, an occasional restaurant meal.  Instead of a budget line, the larger, longer-term wants are covered implicitly when your budget spends less than all you earn.  Somewhere, though, those big, long-term wants deserve a plan.

Having a long-term plan to satisfy your wants is an important tool for keeping your budget focused on your needs.  Satisfying a few of your little wants is what makes your life luxurious and splendid, but it's very easy to let the amount of little luxuries in your life grow until they devour the surplus that might have paid for the big luxuries.

That's where a plan comes in.

Make a list.  Or several lists.  Brainstorm with all the members of your family.  There are the wants that are almost needs--sending the kids to college.  There are the wants that are perfectly affordable, if you make them a priority--a house with a yard.  There are the wants that can wait a long time, if that's what it takes--a round-the-world cruise.  There are the wants that you may never satisfy, unless careful planning meets extraordinary good luck--a racing yacht.  Write them down and sort them in different ways. 

You can produce a strictly ordered list, with the most important want at the top, and then knock them off one at a time, if that's how your mind works.  Alternatively, you can put just the top three or four wants in a "this year" list, with the rest of the wants in no particular order on list marked "the future."  Maybe the cheap wants go on one list and the expensive wants go an another.  Find a way that works for you.

These lists do several things:

1. They remind you, when you're tempted by a transitory want, what your important wants are.
2. They help you structure your spending when you get a windfall.  Maybe the next item on your want list is where that money should go.  Or maybe it should be invested against some larger want that's further down the list.
3. They help you structure your spending when see a sale on something you want.  If a great price makes one of the top items on your want list affordable, maybe you should just buy it.  On the other hand, if the price isn't all that great, or the item isn't near the top of your list, maybe you shouldn't.

If you include some cost notes in your list, you can estimate just how far off the fullfilment of any particular want might be--and you can compare them to one another.  How much sooner could you take your trip to Fiji if you quit eating lunch out every day?  If it just means you could go in August rather than February, maybe keep the indulgence.  On the other hand, if it means you could go next year instead of three years from now, maybe those lunches out are costing you more than they're worth.

Making and maintaining these lists, by the way, is a good deal of the fun.  My wife and I are contemplating renting a garden plot from the local park district and have reached the list-making stage.  It's a small want--use of the plot from April to October will cost $20--but there's plenty to plan.  We need to investigate what grows well here and then match those possibilities with what we want to grow and what we want to eat.  We'll have to buy (or acquire some other way) a few tools, some seeds and some seedlings.  Now, at the turn of the year, is the time to read books on gardening.

Depending on your nature, these lists might change all the time, or they may be quite constant from year to year.  Not too long ago, I came upon a list of wants I'd made in my last semester of college.  I'd just become interested in money and investing, and one thing on the list was an expensive subscription to a financial newsletter.  I remember that I did get that subscription.  I read (and reread) those articles for several years in the early 1980s--a want satisfied with pleasure that I remember with great fondness.  (And stuff I learned in those articles informs my writing here to this day.)  Also on the list, though, were wants I'd long forgotten.  Some I'd satisfied along the way, but that I don't remember with any special pleasure.  Others I'd forgotten without them ever having made it to the top of the list.  Looking at old lists of wants can give you real perspective when you start feeling like you've got to have the top item on your current list right now.

It's your plan; use it however you like.  Maybe you want to put one big want--a sports car, a two-year sabbatical, a cottage by the lake--on the top of the list and focus on it to the exclusion of all else.  Maybe you want to juggle many large and small wants in one big list.  Maybe you want two lists, one with the small wants and one with the big wants.  However you structure it, though, remember that its purpose is to support your budget.  The plan to satisfy your wants is what you come to when you're tempted to blow out some line item on your budget.  Look at your list.  If this is something that belongs right at the top, then scribble it in there.  If not, scratch it in wherever it goes.

Then, live that way.