• Morag McIntosh

Financial Freedom and the hierarchy of needs

Financial Independence is crucial to thriving in tough times. It’s what allows you to chart your own journey on your own terms. It’s the option of leaving a bad situation, instead of being forced to continue in it. It’s the freedom to take chances, to try new things and to see what sends sparks of excitement zipping through you. It’s knowing that everything you truly need is within your means. It’s a good night’s sleep uninterrupted by three am freak outs about money.


Three AM money freak out in progress!

Most people are familiar with Maslow’s Hierarchy of needs. It is used to illustrate not only the universal needs of human beings, but also the path to Self-Actualization or connecting to your highest self. Unsurprisingly financial freedom plays a role in attaining each of these needs. In the next few weeks I am going to put together my thoughts on how your financial journey is tied to your journey through the hierarchy of needs.

Hierarchy of ultimate needs


Physiological Needs


It seems fairly straight forward on how money can aid a person in meeting their physiological needs for food, shelter, clothes, clean water and general health. Having little to no access to money restricts or limits your choices severely in obtaining physiological security. This is why when I teach budgeting we talk about each of these categories as basic needs and why the largest part of any budget is devoted to meeting these needs. However it’s important to be realistic about what constitutes a need versus a want even in this category. You may want a pair of luxury shoes, an expensive dinner, massive house and Botox, but the first step to gaining Financial Independence is to recognize that these are not needs. Needs are your bare minimum for physiological safety. Everything beyond that is a nice to have.


It's easy to confuse a need and a want. It's easy to justify how a want is actually a need in this specific case for the following reasons (it'll save me time, it will practically pay for itself!). It's hard to put off buying what you want right now, there are so many messages in our culture about instant gratification, your worthiness and your status. So I am going to include a list of questions you can ask yourself to help you determine needs vs wants.


Questions to ask your self about your physical needs.

If I do not have this thing right now how long can I physically survive?

What sacrifices/changes would I need to make to in order to survive without this thing?

How long am I able/willing to make those sacrifices?

If I only had X dollars (same amount as purchase) to my name would this be a justifiable purchase?

Can I get this thing for free?

Is there an alternative to this thing that allows me to survive without spending as much?

Do I have an emergency fund? Is this purchase a true emergency?

Based on my financial means how realistic is my rent right now? This is a longer term question to be sure...

Is this purchase required to make money? Steel toed boots could be required, a new handbag probably not...

Do I already have one or more of these things?

Can I prepare for the future to make sure I don't run in to a situation where I can't survive without having to buy this thing?


Clearly there are things we all need to survive, but in all of our needs there is a lot of wiggle room for justifying a want. You might want delicious taco's from that awesome new Mexican Cantina, but you will survive better and for longer if you purchase food and make it at home. You might want a new set of shoes; you might even be able to justify it as a need based on your type of work, but if you can't pay your rent (or your debt off) you need to be realistic. Housing trumps new shoes. If your car dies and you have no money to fix it you may need to find other ways to get to work that are not as convenient while you make enough to repair the car. How long could you continue to use the alternate transit in order so save up a car emergency fund for the next repair?


The good news is that once you are able to meet your basic, physical needs you can move on to the next stage, which is guaranteeing your safety.


If you would like a free budget template in Google Docs, reach out to me. I have created one that allows you to add your monthly expenses, see what percentage is going to needs, wants, the future and free money. It also shows you how your net worth is improving over time.



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