Friday, January 09, 2009

Need-to-have vs. Nice-to-have

I recalled my childhood days when my grandma taught me these words in Tamil :
Avasiyam ( Need to have, but can manage without it ), Athyavasiam ( Necessity and cannot do without it), Anavasiyam ( Not required and is definitely a waste of money) and Adambaram ( Luxury and can do without it).

Need to have is a car
Necessity is a means of transport
Not required is a Mercedes Benz car
Luxury is a Honda City car

Need to have is a study table
Necessity is a comfortable study set up
Not required is an artistic table with a lot of wooden carving
Luxury is a Rose wood table with a glass top

Need to have is dinner at a restaurant with a nice ambiance
Necessity is dinner
Not required is dinner at a five star hotel
Luxury is dinner at a restaurant in a resort

I remembered this when my friend was talking about Need-to-have and Nice-to have choices that we must make.

A snippet from one of the conversations with a friend on Need-to-have and Nice-to-have in life, as narrated by him when our group was discussing cost cutting, recession, job cuts, luxurious lifestyle and other view points.

"The other day I had taken my son to a popular furniture show room to choose a study table for himself. It was a long pending plan and my son was extremely thrilled to do the much awaited shopping. He spent a lot of time analyzing the different tables, their make, the mica shine, the finish, the color, the number of desk drawers, the pen stand and the drawing table. Finally, he and I agreed upon one table that I would say was the best choice. We were both very satisfied. I asked him to note down the details about the table including the cost. He promptly did so and I said " Let's go and come tomorrow". He asked immediately " Why Papa, don't you have enough money to buy this table?". I showed him that I was carrying rs.7000 and that was more than enough for the chosen table priced at Rs.6000. I said, 'Postpone decisions like this for a day's time. Let's come back tomorrow to the same shop and buy this table'. We went home without buying the table that day.

The next day we went on a casual roam to a place in the city where wooden furniture are known to be sold. There were no plush shops there but a long line of shops that sold similar wooden furniture. We went to different shops and enquired about the study tables. My son, having gained a lot of experience about what to look for in a study table, the previous day, was examining each of these tables as well. It had polished mica, drawing table, and better desk drawers that can hold much more books and papers. When I knew my son was getting interested in the table, I asked him to find out the price.. The price was Rs.1800.

My son had two options now. One, to go back to the show room and get the table priced at 6k or select this table that serves every purpose of his for 1800.

I told him: The table in the show room is a nice-to-have item and this table is a need-to-have item.

All you need now is a study table that serves your purpose...The table in the show room is a nice to have item because it has a brand and may be a better quality, but honestly tell me, will the brand make a difference when you place your books and notebooks on the table to write your homework? After the next two years of your study, will you be carrying this table to your college or anywhere else you go?

So when you get what you want as per your specifications at a lower price why do you have to spend more on another high-priced similar item? If you save this money now, you can use it for something else at a later date."

The boy got the point and finally the father and son took home a lovely study table for Rs.1800, thus saving Rs.4200.

It need not be always investments in house, land, gold, mutual funds, insurance policies,fixed deposit accounts, and savings bank account to ensure your financial position... it is also about thinking twice before spending that cash... This in itself could save a lot of money.

Spend, not because you like it, but because you need it.
Spend, not because you can spend, but because you want it.

Save for a reckless spend once in a while, but never spend reckless all the time.

1 comment:

Rajesh Dangi said...

Thanks for putting this nicely, I am sure the learning will go long way as 'the son' gains his adulthood...

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