Need vs. Want

Do you ask yourself at the end of every month:  
Where in the world did my paycheck go?
Well, I know the answer.
It was divided up among your needs and your wants. When I was little I told my parents I needed an Easy Bake Oven.  They said, "No, you want an easy bake oven. You don't need it."  I clearly thought this was absurd since the cute little cakes and brownies you could make seemed pretty much a necessity in my 7-year-old mind. But like many lessons this makes much more sense now that I'm older.

So what are some basic things that us Millennials

 (20-somethings, post graduate, under employed and fabulous) NEED?

1.  Housing: Obviously we need a place to live, but many of us are moving back home or taking on roommates when we are 28 and vowed never to go down that road again. This is nothing to be ashamed of. Unfortunately, this is just a reality of the housing market fall out and now the renting market is raising prices on us as well.  So not only can we not qualify for a decent mortgage, but we are being gauged for rent too.

Here is a Rent vs. Buy calculator if you are considering making the BIGGEST purchase of your life:
Rent or Buy?
The down low: If you stay somewhere for more than six years and you have good enough credit to qualify for a low rate mortgage, then buying is better. If you have an unstable career path or family situation, then I would seriously consider renting a home or apartment.  

2. Insurance: I'm going to talk about insurance A LOT.  So get used to it! I am an insurance agent, and I have certain feelings about what's worth it and what's not from seeing claims and hearing my client's frustrations.

Here is a link from Yahoo! Finance about the
 4 Types of Insurance Everyone Needs
The down low: You need 1- Life 2- Health  3- Disability Income 4- Auto.  I would add to this Renters/Home Owners.  You have to have Auto by State law and if you have a mortgage or an apartment complex/landlord who requires it, then you need the homeowners or renter's policy.  The renter's is super cheap and should provide you with a multi-line discount from your auto insurance provider.

3. Cell phones:  We wanted these next two things so bad when we were in our early teens, but now that we have them we also have the bills that come along. To save money on your cell phone bill see if your company is on the business discount plan at your cell phone provider (I save about 15% with this discount!).  Add a relative, friend or boyfriend to your plan that you trust to share an unlimited plan and split the bill.  Or if you are not on a contract, try  Straight Talk for six months and see if the service is worth the savings.
The down low: You don't need the newest iPhone (but buy the insurance for at least a year if you do splurge) or an unlimited data plan (a small minority ever use more than the standard 2GB of data). Choose a low limited minutes (I go with 700 and use about 100-300/month) with roll over plan and unlimited texts. Train yourself to text simple messages rather than wasting minutes during weekday/daytime hours. 

4. Car:  Working with auto insurance, I see people spend BIG money on the worst investment of their lives, a car that drops 20% in value the second they drive it off the lot.  You will NEVER make money on a car, but it is necessary to get to work so that paycheck comes in.  Choosing an apartment closer to where you work will help at the pump, but also telling your insurance agent that your daily round trip is less than 20 miles can help with your classification.  You don't NEED a Land Rover, BMW, or a Hummer. You will just look ridiculous to your friends and won't be able to afford the insurance coverage you really need. While shopping for a car make sure to use an App like Progressive or State Farm Pocket Agent to shop auto rates instantly on your phone. Make sure you SPEAK to an agent before putting a plan in place since they will be able to suggest the best coverage.

If you are considering leasing vs. buying, check out this website:
Smart Money: Buy-or-Lease A Car

What you WANT is basically everything else! Duh. Determining a budget will help you distinguish the two categories where our paychecks are disbursed.

**Check out the next blog where I will discuss HOW to budget your needs vs. your wants.