Desires are not Needs

Petty Savings: A Simple Habit for Smarter Spending

In today’s digital world, where every transaction leaves a virtual footprint, what often gets overlooked is tracking those expenses in your own records.

A crucial habit to develop is maintaining a personal expense log. It’s not just about recording where your money goes but also about categorizing your spending effectively.

Classify Your Expenses

To keep things simple, avoid excessive categorization. Broadly, expenses can be divided into key categories such as EMIs, Rent, Food, etc. However, the most fundamental classification should be:

  1. Needs – Essential expenses necessary for daily living.

  2. Desires – Non-essential, impulse-driven expenses.

Building the Habit

At the end of each day, list all your expenses and assign them to either the Needs or Desires category. This practice helps you recognize patterns in your spending, including impulsive purchases and restrained decisions.

Over time, this habit improves financial awareness and helps you make more mindful choices.

Smart Spending in Action

For example, if you're ordering lunch, fulfilling your hunger is a Need, but indulging in an expensive meal just to satisfy a craving falls under Desires. While occasional indulgence is fine, recognizing the cost difference helps in better financial planning.

By consistently categorizing your expenses, you’ll gain better control over your finances and make smarter spending decisions every day.


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