Finance Friday | Needs and Wants
We all need water and food and we need to keep warm in winter. The divide between what we actually need and what we want is getting a little blurred. Do we really need mobile phones, cars and internet? I think we want these things and a lot more, but we don’t need them. We don’t even need television…
When you’re trying to budget and live on a limited income, you have to put what you really need first. Even if you’re not struggling and want to live worry free, you can make priorities and put what you need before the luxuries.
One of the reasons the UK is in recession is the high cost of housing, if interest rates were at market rates, many people would be losing their homes. Rents for social housing have spiralled out of control and with them housing benefit; hence the malicious cuts if people have a ‘spare bedroom’. Other essentials have gone up in price with privatisation and taxation. The 8% tax on domestic energy has added to rising energy costs and made just keeping warm in winter beyond the reach of some people. Food prices are going up with energy costs, despite manufacturers trying to keep costs down. Cutting pack sizes and sourcing raw materials from overseas have not only seen quality drop but health risks too.
Ordinary people need to get their priorities right and so do governments. I actually agree with some cuts in government spending. I’ve seen multimillion pound road schemes and the road is no better afterwards. There are too many cars on the roads and we should have policies to encourage employers to employ local people. We should encourage people to walk to work, we should encourage children and their parents to walk to schools. Forget speed humps near schools, it is the parents doing the school run that are the problem. We could have residents only parking near schools (except for the disabled). Councils could save a fortune on daft traffic calming schemes and many other politically motivated schemes. If we are going to privatise council services, it should be the council run gyms and things people want; not things that people need. This week I saw a public health official was earning 250,000 a year and now he had been given a payoff of 600,000 pounds to get rid of him. If Labour want to win the next election, they should think about sustainability not growth and limit salaries in the public sector to £80,000 a year. Can’t find anyone good enough for £80,000? They don’t look hard enough. A degree from Oxford, a narcissistic personality and a big mouth doesn’t make someone capable of running anything.
We do have to survive this recession and the political ideology. They had a very long recession in Japan and now they are being more sensible. We have to put essentials first, think about our needs and not get brainwashed by the media. The Wonga advert might look cute, but there is nothing cute about being in debt and having to pay interest at over 3,000%. Even an interest rate of over 10% on a credit card is too much. I do get interest on savings and investments and that does allow me to buy what I want sometimes, but I don’t waste money paying bank charges or interest. Only borrow to buy something that will save you money or make you money.
I did go in McDonalds once with a friend and I bought a drink. The food didn’t look very good and cost as much as several decent meals that I can cook. I walked through Costa coffee a couple of times, it wasn’t a pleasant experience and I certainly wouldn’t spend money in there. I certainly don’t need to be ‘seen’ in Starbucks and I’m not ashamed to be ‘seen’ in Poundland or Aldi. I see no reason to change my car for a newer model. I looked at one, it had a built in sat nav and other refinements. I don’t need it, my car gets me to where I want to go. I can spend the money on things I do need or even things that I want, but are better value.
I think that we do need some entertainment and stimulation. We also need to spend some time in a natural environment. Basic entertainment for most people is television and I think the television licence should be abolished for that reason. The BBC could also do something to raise standards in television and become less politically motivated. We don’t want gay programmes or for that matter pseudo-state funerals. Popular programmes are popular by consensus. Much as I hate Eastenders, that is at least watched by people more than some of the high art programmes.
Finally, we need to get away from the culture of consumerism and adopt a culture of sustainability. Are you listening Miliband? Please comment if you have any thoughts on the subject…