I agree, that on the level of healthy, secure & safe survival a family of 3 needs a 1 bedroom home.

But I’d argue that in a modern society it will odd to have a family of 3 (albeit with 2 of 3 as a couple) living in a 1BR home… Where does your child live? In the living room? Kitchen? Hopefully not in your bedroom…

I’m having this debate now while looking a starter home–We have been saying that we “need” 3BR because we would like 1-3 children so that means we’d need at least 1-2BR just for them, ideally a 3rd BR available for parents to stay for days/weeks at a time to help, or maybe as an office.

So what do we really, truly need though? Right now 1BR. With children, we feel 2BR.

That said, I have a dear friend who grew up in a 1BR, 4 room apartment–his parents had the bedroom, his sister had what would have been the dining room (which doubled as the living room as well), and he had what would have been the living room. So they turned the 3 rooms of that house into bedrooms. It wasn’t easy, but it’s what they could afford and they made do.

It’s all in how you look at things…

I forgo A/C in my home, but I definitely consider it a need in the car. I use it mostly when highway/freeway driving (speeds of 45 mph+). At one point in life, I didn’t use my car A/C on the freeway. Then, I took a road trip. I spent a good hour sweltering and mentioned that to my dad during a quick phone call. He said “just turn on the darn A/C.” It was either that or consume gallons of water to replace what I was sweating out. So, while I really dislike A/C, I definitely find it a need while in my car.

Now, if I were just driving 5-10 minutes on city streets to work, that’d be another story . . . but if I had that short of a commute, I’d be biking to work (and I did when I worked that close).

I like this article a lot for the jumping off point of thinking about what is required and what is nice. We all have different needs, and it’s important to make sure we’re balancing the costs of our own needs/wants. Leverage your money to help your life, yes. But don’t pour money into something that is vastly more than what you need.

However, to me, this was a KEY to getting out of debt. Honestly assessing each “need” and determining whether it is not truly a “want” that can be put off till later.

I consider the shifting of “wants” to “needs” as kind of a gift for the hard work of getting out of debt.

To your main point — we’ve found it very important to keep our eye on both our luxuries and our necessities. With two kids, our needs and wants change as the kids grow, not to mention our priorities.

DH and I tripped over a similar issue to Baker. We “needed” a bigger apartment. Really, we just needed a BETTER apartment; the one we were in was heinous.

But … we went from the heinous $1450/mo 1-bedroom to a $2100/mo 2 bedroom that actually had twice the square footage, plus secure parking and entry, plus safe outdoor space for the cats, plus A/C, plus a 2nd bathroom … . There’s room for us to meet with clients, to have dinner parties, to practice our dancing, to easily accommodate overnight guests.

It is still more space than we “need,” and I certainly don’t want anything bigger. I’m hoping we can stay in this place until we actually leave town, ’cause it would be hard to beat.

A three bedrrom home often triggers purchases of additional furniture, to furnish those rooms, likely a want. And then you end up needing more in utilities to heat/cool the extra room. So the extra $300 a month doesn’t even account for the furniture costs and increased utilities (unless utilities are incldued).

Not that having more wants and needs is bad, my concern is when wants become needs which become fixed costs.

With a six month rental the extra money you are paying for that extra room is finite. But when you buy a larger home than you need to you take on car loan, lease payments, other fixed costs like private school for the kids, country club costs, etc. All of a sudden you end up with very high fixed costs and if you enter a downturn (like the recent economic downturn) you end up in trouble.

That being said, it is important to make sure that wants/needs are carefully considered. While sometimes ‘want a separate office’ actually is a need: “Need a quiet place to work”. Make sure that the attention is realistic, and the price may make the difference between ‘getting work done’ or ‘being frustrated by not getting any work done’

My husband and I are taking a 7 day Carnival Cruise this summer for about $2000 total since he’s a teacher and really couldn’t pull it off during the off-season – we enjoyed the 5 day one we went on last year too (that was about $1500 total). I’m with you, off-season cruising is one of the least expensive luxurious vacations ever!

We left out a ton of other wants in order to get the ones that were most important to us. We love our home and all all our little luxuries…it really does make them that much sweeter when you know you picked them since you liked them the most…

This was a great lesson for you to share with all of us so that hopefully we will all be more aware of indulgence creeping into our lives.

Having never been on a cruise, I suggested one to him. “We can’t afford that — it’s thousands of dollars!” he replied. I was shocked because in my research the numbers came to under $1000 for the two of us. As it turns out, his “needs” and mine were — to put it kindly — divergent:

* I wanted a quickie 5-day to Mexico since we could drive to the embarkation point, while he “needed” 10 days to Alaska (which would require flying to Vancouver).

* I was fine with an interior cabin (heck, wasn’t planning to do anything but sleep in there!), but he needed a suite.

* I was willing to travel during the off-season. He needed to travel during the the height of tourist season.

* I was looking at Carnival cruise lines, but he felt they were too low-class.

By considering his wants as needs, it made a cruise out of reach for us.

(Epilogue: In frustration, I finally arranged a trip with a girlfriend. We cruised to Cabo San Lucas and had a fantastic 5 days; it cost me about $400. Husband: “I can’t believe you went on a cruise without me.”)

Is it your goal to spend as little money as possible? To have as little impact on the environment as possible? To live like someone in the 3rd world even though you aren’t?

For myself, I believe that wisely spending money is a good thing for our society and our economy. I am against being a miser for no good reason–that’s called a waste of time or even avarice.

If you aren’t in debt and you have a reasonable amount of savings for you and your family’s future, why not spend the money to make your life more pleasurable, easier, or productive?

I think enjoying luxuries is great, so long as they don’t prevent you from being in good financial shape.

Anything beyond that is only a need if it’s conditional on some other goal. Like “I need a car to commute to work”, it’s only true if you’ve decided that commuting to work is a goal you’re not willing to give up — plenty of people around the world survive without this. Your car’s only a ‘need’ because it’s required to satisfy a completely elective goal of living far away from work, in an area with poor public transit.

This isn’t to say that buying a car and living in the suburbs is a bad choice (I do it myself), it’s just to say that these things are all electives and not actually required, so calling them ‘needs’ doesn’t really mean anything. I could save money on a car by renting one of the apartments across the street from my office. I just don’t want to live there.

Baker’s right — perspective is important, and nothing gives perspective like spending some time in a third world country. Be conscious of what you’re able to have and recognize that almost none of it is a basic need. Almost everything we concern ourselves with day-to-day is elective, it’s not helping to keep us alive, we just enjoy it.

Your writing rang true to me, maybe with a different slant. I was a workaholic and extremely frugal until diagnosed with breast cancer and had surgery and a year of aggressive treatment. Now some of my “wants” have morphed into “needs” when it comes to quality of life and how I want to spend my time and where. Whereas I used to postpone vacations or visits with my grown children because of work, I no longer postpone any kind of joy and I never say no to opportunities that strengthen a relationship or enable me to explore the world. Cancer was a great wake-up call, and I’m grateful, not only for these big awakenings, but for the small gratitudes too, like no longer having my days punctuated by weekly chemo or daily radiation. I agree with your reader Elisabeth – it’s so important to satisfy and nurture joy. Right after my cancer treatment ended, my oldest son and I returned to Paris, a trip we had actually kept postponing for eight years. I’ve traveled more in this last year than in the last few years combined. I know it sounds weird, but I thank cancer every day for this new life. I kept a blog every day and that was such a joy. http://www.ddlatt.blogspot.com

I look forward to your column every day!

The $1000 a month apartments had everything we needed, but once we saw the difference in $1200 we had to have them.

On the other hand, I think it’s ok to budget in for some wants every now and again – if you’ve worked hard, budgeted for it and other priorities aren’t being lost in the shuffle, why not!

We’ve watched all of our friends upgrade their starter homes to something larger because they “need” it. We’re happy to stay here, the truth is we’re comfortable and with each increase in size comes not just an increase in the cost of the home but also the utlities, more heating/cooling, which is money we’re not willing to spend. Our focus is to pay off this house, hopefully by the end of this year (after 9 years here) and start saving for some acreage in the country.

Because of our choice to keep our standards of living from inflating from needs to wants, we should meet our goal of living in a nicely built small cottage on 40-80 acres in the country and have it 100% paid off in 10 years. Most of our friends will most likely have upgraded homes another time or two and they’ll still be paying on huge mortgage while we will be living debt free.

This idea can also scale down to things like cell phones, computers and things and gadgets. Sure Mr Chiots would love to have a iPhone, but the reality is that it’s really not worth the huge monthly bill just to be able to check your e-mail when you’re out. Our $10/month phones on the family plan with my family is good enough for us.

Sometimes a little less now means a whole lot more later, especially freedom and peace of mind. You just have to decide if it’s worth it to you.