If you have children, think about walking with them down a grocery store aisle or at a local mall. What items make your kids say, “I need…”? Several times a day, I hear my kids say, “I need (insert the name of a product).” With my kids, it’s usually a brand name item ranging from breakfast cereal to designer clothing. Like most children, mine are susceptible to wanting whatever all of their friends have. Or they crave a product that has some clever, catchy marketing jingle. Or they see something that captures their attention or imagination, and while they didn’t even know the product existed before that very moment, they now know with certainty that they will die unless they have it.

If we adults are honest with ourselves, we often do the same thing. Sometimes we confuse our legitimate need of a commodity with something that functions like an atomic baloney slicer. For example…

• We need reliable transportation to and from work each day, but we end up with much more than a car. We purchase something that is a rolling entertainment center/home office/day-spa on wheels with leather heated seats (heaven forbid our butts warm up slowly on cold days), wrapped in a shiny coat of paint and the best engineering money can buy.
• We need shelter, a place to lay our heads at night and spend time with our families. But instead of a modest house, we over-mortgage ourselves into McMansions that we cannot afford. I saw on the news this morning that 1 out of 3 homes on the market is the result of a foreclosure.
• We need a cell phone for work and family emergencies, but instead of a phone we purchase an iGizmo that can do our taxes, identify a song played on our expensive car stereo, and give us an excuse to never again pay attention during a meeting.

There is absolutely nothing wrong with having the best you can afford. But call it a WANT, not a NEED. We can get by on so much less.

In corporate America, this same mentality applied before the economic collapse…

Companies tore down old, functional brick and mortar establishments to build monolithic towers with the company name emblazoned on the masthead. And now, the ROI on those new buildings will not be realized for many years.

Aged yet reliable computer systems were replaced with the latest and greatest versions of hardware and software. And now, many companies have half-implemented systems that aren’t fully integrated with the business.

Staffing size swelled, and each open position was filled with the most highly credentialed and degreed individual who could be found at any price. And now, many of those who were hired to fill open positions–instead of positions that were critical to the core business–are unemployed.

While the economy flourished, these expenses were called investments. In a down economy, these expenses were deemed expenses.

But today, companies, like individuals, have to redefine what they actually need. Every expense must be reevaluated into buckets of necessity: high value (need to have), potential value (nice to have), and low value (not needed).

What have you cut out of your expenses? Are you suffering because of it? Isn’t it amazing what we can learn to live without?