One of my favorite article I have written has to be Need vs Want. It alighted many of my wants which were kind of hidden under the carpet. Mostly I found all those small expenses which I could not consider as (or convert into) need as we (myself and my wife) could have easily done them if we really wanted to, like Daily Car Wash, Home Cleaning etc. I started to have regrets that I could not avoid my Wants and could not convert them into Needs either.
We could do these small tasks to avoid such expenses, but if we do them on daily basis then our daily routine becomes so much exhaustive. We have tried them several times, but life becomes tough when we do those tasks. We used to have less amount of sleep, anxiety, verbal confrontations etc. But certainly we could handle them in a better way instead of out-sourcing them to others and spending money, my personal finance mind thought so. I could not get to the term to mark such out-sourcing as a need, instead they looked like excuses at times. As I suggested on my Need vs Want article I thought I will avoid it but that was also not the solution as these are daily recurring necessary tasks.
So how do I handle them, is there any better way to handle such an edge cases. I found the answer in Sir Warren Buffet’s Biography book “The Snowball“. The book is literally a Bible for someone who believes in Personal Finance like I do. Here I reveal the process to tackle such nagging wants.
If you cant Justify it, then Rationalize it.
Let me give you a little background about above statement. Once Sir Warren Buffet asked his Head Office’s builder Mr. Keiwit about him buying a jet plane, “How do you Justify it?”. Mr. Keiwit said “I don’t, I rationalize it.” And frugal (good topic for another article) Warren Buffet, who still drives his own car, ended up buying a jet plane for his own business use. So, instead of justifying my such edge cases wants as needs I needed to rationalize them. Sir Warren Buffet can rationalize (in fact even justify) buying a jet plan. But how much can we rationalize our wants, we have limited budgets. My wandering mind found an answer to it by observing one of my freelancer friend. Freelancers usually charge on hour basis.
Value of Time
I thought of coming up with my value of time, my rate card. Based on which I can judge whether the rationalization is within my limits or not. It’s not the cost of out-sourcing but the Value of my Time which should drive my rationalization limits.
All salaried persons know their salary so they can easily calculate hour based income if they do not know. For example, if someone’s monthly salary is 44,000 then his per day income is 2,000 assuming 22 days a month. And hour based income should be 250 assuming 8 hours a month. Accuracy is not important, having an approximate number should be good enough.
Based on my Value of Time (hour based income), if such edge case out-sourcing tasks are giving me pleasure more than my Value of Time OR makes me free to enhance my Value of Time then I think such out-sourcing tasks is within my rationalization limits.
I still can not convert my such out-sourcing wants to the needs, but at least I am able to rationalize it within my limits based on my Value of Time. So that gives me peace of mind. No more regrets.
Try above approaches on your nagging wants.
Image Credit: Transformations Massage.
Also published on Medium.