How an economic theory reduces your expenses
Could Acquired Needs Theory Save You Money?
by Lynn Bulmahn
Delayed Gratification Could Make You a Millionaire
In one of the Tightwad Gazette books published over 20 years ago, a contributor wrote to author Amy Dacyczyn that she thought baby formula was an "acquired need." Since there was a more natural, and free, way to nurse an infant, this young mother considered commercial baby formula an unnecessary "want."
Often, people are convinced that some convenience, product or service is a necessity when it actually isn't. Called an "acquired need," it is actually a want and not something we can't live without. By paying for such conveniences, we waste money for things that are optional.
I recently was reminded of the wants versus needs debate. A friend asked how I can do without a cell phone. I have phones at work and home. The latter is a landline in a special pricing deal; I pay almost nothing for the phone, bundled with my internet. To me, the huge monthly bill with a cellular contract is an "acquired need."
Many high school students can't read as well as most eight year olds could a generation ago. They rarely crack a book. All their lives, they've been given video games and almost-unlimited access to cable TV and smart phones, which are all rather expensive. With such items, is the young person's education (and his eventual ability to earn a living) helped or hindered? I believe the latter is true. Such items are "acquired needs" and very expensive wants. The cost is not just monetary: Consider what a huge struggle it will be for a poor reader to obtain a higher education or high-paying job.
I pay nothing to view television. With a converter box and rabbit ears antenna, my old TV can pick up six or eight over-the-air stations. (I live in a smaller community, so that number is no doubt much less than what's available in big cities.) There are enough programs to fill up an hour or two each night. I can check out a free DVD at the library should I want to view a movie. Paying for cable or satellite is an acquired need. My TV entertainment is free!
Acquired needs are not just electronic. When I worked downtown, the landowners charged us all to park. Most employees went along with this, not realizing on-site parking was an "acquired need." There was an unused plot of land a block away, and Leo, an older worker, told me he'd parked there for years. I did likewise, thus saving hundreds of dollars over a decade. Hey, I needed the money a lot more than the parking lot owners did!
Ronnie and Michelle like to go out on date nights. Long ago, they realized that wine with their dinner was an acquired need, one which made the restaurant a huge profit. They pay for many more evenings out by drinking something non-alcoholic. Tea is cheap, and water is free.
A professor required his students to buy an expensive book, studied for a short time. Realizing it was an "acquired need," Anne checked the book out from her hometown library. Before returning it, Anne took good notes and scanned some pages onto her flash drive to study for finals.
Living in the country, Frank and Nell found that they'd have to pay extra to obtain trash pickup outside the city limits. This was an acquired need they could skip. How? They reduced the amount of garbage by recycling and composting most of it. A trash compactor did the rest. They occasionally took filled compactor bags to their other property in the city, where they were required to pay for garbage collection whether or not they regularly used it.
Would you like to
pay off your credit cards
in less time
for less money?
It pays to understand the difference between an "acquired need" and an actual necessity. People don't need to shell out money for a "want" disguised as a "need." Do you have expensive "acquired needs" that you could easily do without?
Take the Next Step
- Make sure you're getting the best CD rate. Use our simple CD tool to find out. It's completely private, easy to use and you'll know what rate is available to you in seconds!
- Get the interest you deserve! Compare money market and savings account rates with our best rate finder. It only takes a minute and your privacy is completely protected.
- Could spending 5 minutes reading a newsletter twice a week save you time and money every day? Dollar Stretcher Tips readers think so. Subscribe and find out how many ideas stretch your day and your dollar! Subscribers get a copy of our ebook Little Luxuries: 130 Ways to Live Better...For Less for FREE.
Share your thoughts about this article with the editor.
Debt from my past is preventing me from saving for my future! Tell us: Yes, debt is hindering my ability to save and I could use help dealing with it! or No, debt is not a problem but I am trying to get ahead financially!
More Money Tips & Tools
- How to get a faster tax refund
- Personal finance calculators everyone should use
- Why you should know your credit card payment cutoff time
- Saving-money secrets of the rich and frugal
- 5 low-risk ways to earn higher interest now
- How to save money fast
- 7 IRA withdrawals that don't trigger a penalty
- This week's Readers' Tips