And no matter how smart or motivated the person is, if they NEED to reenter the workforce in a down economy, they are at an even more serious disadvantage. The lack of networking, solid work references and a demonstrated history of showing up for work are going to hurt, big time.

And don’t forget–lots of people who are steadily employed are neither smart nor highly motivated! And God help the stay-at-home parent who is neither and suddenly needs to reenter the workforce.

Even if you don’t have a part-time job, volunteer with organizations so that you can have the experience, references and contacts you’ll need should the roof cave in. Take courses. Learn new skills, even if you have to ask your kids to teach you. You’ll be protecting yourself and your family.

Even though I grew up in a very large house (nearly 6,000 sqft) I’ve had no trouble living w/ my family of 4 in under 1500 sqft.

That decision has saved me a ton of cash over the last decade, which I’ve used to upgrade the quality of the amenities in my small house – new, efficient HVAC, added real wood (no pergo) floors, etc.

Most people who live above their means seem to have a sense of entitlement: Not only do I want cable, but I am *entitled* to it, therefore I have to make room for it in the monthly expenditures. I can’t possibly do without it, because I need it.

Those who make an effort to live below their means can achieve empowerment: I don’t necessarily need cable, but I like it, so I want it. I’ll put it in the budget, but if I have to trim the fat, I can do without.

I have been critical of posts on this blog in the past, perhaps too critical, but this one is truly excellent. I think doing this full time is starting to pay off for you.

I have to admit that after years of being tight, struggling with enough money that I’m finding it very hard to move beyond a basic frugality. It is so being able to shop with cash rather than credit cards, I want to enjoy actually having enough money for a change (although our level of income hasn’t changed) and some how being super tight again is an unpleasant reminder of how it used to be, even if it’s by choice

http://7million7years.com/2008/04/10/10-steps-to-whatever-it-is-that-you-want-how-to-weigh-up-the-cost-of-a-lifestyle-decision/

If Trent (or any husband) dies or becomes disabled and loses his job, through which he has health insurance, all that money may well vanish. Any long-term stay-at-home parent ends up at a severe disadvantage in the job market. Working at least part-time keeps their foot in the door and gives them the opportunities should life throw a big monkey wrench into their plans that they will NOT have if they have been out of the workforce for long periods.

Then there is the matter of temperament. Some people are simply not cut out to be a stay-at-home parent. They will go stark raving mad, but if they can combine parenting with a fulfilling job, everyone is happy.

Staying at home for 10 years or more is not a viable career path. People who reenter the workforce after a long break lose an amazing amount of money, in the hundreds of thousands of dollars. They lose the immediate income, they lose raises, they lose career advancement opportunties, they lose retirement income opportunities of compounding, networking opportunities and many more.

People who CHOSE to stay home with their kids need to know the financial sacrifice they are making. AND they need to be very sure that the stay-at-home parent has adequate life and disability insurance. I’m not sure of the numbers, so you better do some research to see what it would cost to replace that person’s services. It should be in the neighborhood of $200,000 for life and probably up to $60,000 in disability insurance.

But nobody has the right to say that Trent’s wife’s NEED to work is a WANT. You could equally say that Trent’s NEED to work is a WANT and he should give up transportation instead.

Much of behavioral finance suggests that peoples decision making surrounding money has as much do to with actual material needs as it does with psychological needs.

For example, many people choose to spend money on conspicuous consumer goods may actually be responding to an underlying unconscious need, e.g. they may be responding to feelings of inaequacy, parental modeling, etc.

Best,

James

I explained that there is nothing wrong with wants, it just means you are spending more money for something you don’t need to survive. I was trying to make them understand that buying wants are choices we make and that we should be conscious consumers instead of buying into fads. Every dollar spent now on a want is one less dollar to spend on a need later. I was trying to teach delayed gratification.

Our society has morphed into a “gimme now, buy now, pay maybe” culture. The current financial mess is a direct result. People give lip service to delayed gratification as they justify their buying as being “deserved” or a “small splurge.”

Excellent post! That’s right, we can “survive” on rice and water living in a cell, but what kind of life would that be?

To use the bleakest most spartan contexts as a baseline of “enough” is forgetting that we have human brains and (as I said way up above) need stimulation.

However, to support the values and lifestyle that they choose, one person may consider the same item a “need” while a second person may consider the same item a “want.”

I personally believe that good, clean water is a necessity – a “need.” People have survived without clean water; in many parts of the world, clean water is a luxury.

My chosen lifestyle includes clean water, a good home in a safe neighborhood, books, and entertaining other people. It does not include cable tv, fast food every night, or a new car. That does not make my chosen lifestyle better than anyone else’s. It just means that I need to clarify what my lifestyle will be and determine from that point what my “needs” and “wants” are. It is important that my “needs” and “wants” are not dependent on other people’s image of what “needs” and “wants” are. Advertising should not sway me (even though it does on a daily basis).

So the important thing is that I examine what my chosen lifestyle will be and make choices consistent with that lifestyle and not choices dependent upon advertising, pressure from others, or mood! On a daily basis, I need to examine my impulses and ask, “Is this a need or a want?”

I get really annoyed when I tell people that my DH stays home with the kids and they say “wow you’re so lucky to be able to do that!” No. We *decided* to do that and made it happen. We are without much, yet still *decide* to be with much more! (ahem… which may or may not be why I am poking through a PF blog)

When our third child was on the way, many said “I guess you NEED a minivan now, huh?” NO. We have *decided* that is not necessary, and did a little research to find something to fit three seats in the back. And so on.

The danger comes when you aren’t *deciding* but being told, and/or just assuming what you “need” without evaluating what your needs really are.

Thanks for making me consider again (and many others, it seems!) my needs vs. wants.

Example. I NEED a good emergency fund and I NEED to pay down debt. Well, I’ve been working on that long enough now that I also WANT a good emergency fund and WANT to see the debt numbers go down.

When I see the EF go up a little and the Debt down a little, I actually get a buzz from it!

Of course, I indulge in some other WANTS now and then, but I find that I think about them much more before buying and they tend to be a bit more practical than they used to be. It’s a nice balance now and I don’t feel guiltly about those theatre tickets I have for the middle of the month!

I have to agree with Jay. Are you sure about this being a need? I think this is more of a want by both you and your wife to live a more comfortable lifestyle and send your kids to an expensive day care.
Remember, needs are what is required to survive. Wants bring the comfort level up.