Dave Ramsey
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Dear Dave,

Can you please define “necessities” in today’s world while trying to get out of debt and live on a budget?

Matthew

Dear Matthew,

Whether you’re talking about the world today or 50 years ago, necessities haven’t changed. Necessities are still food, shelter, clothing, transportation and utilities. We’re talking about needs versus wants. The problem is that many people were never taught that there’s a difference between the two—a big difference.

Most people have enough food to eat and a decent place to live. Those are necessities. I’m not talking about eating out or having a big, fancy house. Those are wants. Most people also have enough clothes in the closet and a way to get around town. They may not have designer clothes or a fancy foreign sports car, but again, those are wants, not needs. Keeping the lights on and the house warm in winter and cool during the summer? Utilities are a need. But no one needs a $300 super-deluxe cable television package.

Now, there are some important wants. I want you to have life insurance to protect your family. I also want you to have a will and health insurance. I want you to have some other nice things, too, like a better car or a nicer house. There’s nothing wrong, at some point, with having a few toys or eating at a good restaurant once in a while. But again, these things are wants, not needs.

Believe it or not, very few Americans struggle with basic necessities. Sure, there are hungry people and homeless people in America. Those of us who have been financially blessed should want to help the less fortunate in ways that allow them to get back on their feet and start providing for themselves again. But most folks in this country have nothing to whine about. There’s nothing wrong with having a few wants, but you should define them correctly—and never, ever put them ahead of your needs!

—Dave

Dear Dave,

I’d like to start investing in mutual funds, but I have no idea how they work. Could you explain about them please?

Jennifer

Dear Jennifer,

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Dave Ramsey

Dave Ramsey is a personal money management expert, popular national radio personality and the author of three New York Times bestsellers.
 
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