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Maslow's Hierarchy of Needs

Abraham Maslow, a humanistic psychologist, is known for establishing what is referred to as a hierarchy of needs. Maslow believed that human beings are fundamentally good and are motivated by unsatisfied needs. For example, if you were homeless and someone offered you a choice between extended shelter or a designer watch, the lacking of the basic need of safety and security would overshadow the value of the watch. Without thinking one would undoubtedly choose shelter. Thus, instinctively the simple needs are satisfied before the complex needs.

According to Maslow, there are five levels of need from basic to complex: physiological, security and safety, love and belonging, self-esteem, and self-actualization. He arrived at this conclusion by studying intellectuals such as Albert Einstein, Jane Addams, Eleanor Roosevelt, and Frederick Douglas, unlike his predecessors. We will study the story of *Tina, who is like many, a financially challenged consumer.

In terms of credit, we want to look at how needs and deprivation of needs contribute to debt and its accumulation. We’ll start the journey at the most basic level of human necessity.

Physiological

Physiological needs are biological, things the body needs to survive that cause us to involuntarily seek them out in response to short supply such as air, water, food, and sleep. Lack of sleep, for example, may cause an otherwise responsible adult to fall asleep at work or a student to fall asleep in class. The need for sleep is truly beyond your control by that point.

Now, how can the physiological needs get us into trouble with creditors? Look at the following scenario.

"*Tina always took pride in being able to take care of herself. So when she lost her job as a result of downsizing in late October, she relied heavily on her credit cards for groceries and household needs. In one month’s time, Tina had amassed a total of $600 in groceries and incidentals. Because she was unable to find employment, Tina was only able to make minimum payments on her card using funds in her savings account."

The physiological need attempting to be satisfied here is for food. A better choice for Tina to have made would be to have used savings account funds for immediate needs. Most people set aside savings accounts for emergencies but fail to use them when an emergency occurs if credit is available.

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