If you've ever been strapped forcash, you've probably thought about the value of a dollar and the importance of making it stretch. Faced with a financial disaster or a hemorrhagingbank account, suddenly the memories of blowing savings on extravagantiPod accessoriescome rushing back. In the midst of researching the resale value of iPod gloves, it strikes you that it's time to reduce expenditures and simplify your life to make ends meet. But just how much money does it take to get by? To find out, we have to distinguish needs from wants. That can be a difficult task.
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Even when headlines report bad news aboutunemploymentrates and ballooninginflation, the poorest people in developed economies are doing better than most of their ancestors did. Economist Julian Simon says that there may be no free lunch, but at least it's getting cheaper and cheaper [source: Simon]. We don't have to live like monks and take a vow of poverty to live comfortably. But, on the other hand, as our standards of life skyrocket, so do our expectations.
For example, most of us couldn't go without ourcell phonesfor one day. When asked if we really need them, we can argue "for my job" or "in emergencies." We probably won't die without them. But such a utilitarian definition of "needs" arguably takes the life out of living.
So where do we draw the line when we budget? Do we make allowances for our physical and mental health? Although we may get rid of gym memberships and days at the spa, should we cut healthy-but-pricey foods from grocery lists and stop the occasional trip to the movies?
有面子的因素。经济学实验ert Adam Smith argues that social embarrassment plays a part in determining necessities of life [source: Smith]. For instance, if not owning amicrowaveoven makes other people think you live in poverty, it counts as a necessity from a social perspective. But people got along fine without microwaves for millennia.
Although it's nearly impossible to determine a definitive dollar amount to answer our question, it'll help to look at one standard: the United States Census Bureau's poverty threshold.
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