What counts as "a need"?

July 23, 2021

So let’s say when you have finished adding up everything you spend on “needs,” there is very little left. Your needs spending is over 50% of your income. What do you do?

overspending on needs

First of all. Pat yourself on the back for looking at this and not pretending it is not happening! This is often the hardest step, and it is going to lead you to freedom.


Then, look at what counts as a “need”?


Here we go:

Housing (rent or mortgage)


Utilities (average monthly cost for electricity, gas, water, sewer and garbage collection) so you are not in the dark.


Basic phone service and internet connection (not including a new phone unless you have already signed a contract obligating you to pay for a new phone you are already using.)


Health insurance, medicine and medical supplies


Monthly car payment or lease payment


Car insurance, maintenance and gas

wrecked car

Other transportation costs (parking, bus or subway fares, etc.)

bus pass

Other Insurance (life and disability)


Food (rice and beans, not steak and caviar)


Legal Obligations: Any time you sign anything promising to pay a certain amount of money going forward, like a cell phone contract or a gym membership this moves from the flexible “wants” category to a “must-pay” category.


This includes debt, like student loans that must be paid monthly.


Also included: legal obligations like child support.

Log all these needs, so you can see where to make changes. Come back next week to see some places to start spending less on needs.



All Your Worth: The Ultimate Lifetime Money Plan by Elizabeth Warren and Amelia Warren Tyagi.

© 2022