Differentiating between wants and needs can be difficult for many people, and if you can’t tell the difference, it may hold you back and prevent you from learning how to save money.
The average person has a lot of debt. They might have credit card debt, loans on furniture, a mortgage payment, a car payment, and more.
However, if you want to improve your financial situation, whether this means getting out of debt or to stop living paycheck to paycheck, you are going to have to face one major thing – distinguishing between wants and needs.
Some items are needs, but many of the things we buy are actually wants. And, confusing wants with needs may be causing you a lot of financial stress.
Remember, the only things you actually need include a place to live, a certain amount of clothing, and food and water.
What is the difference between needs or wants?
To quickly determine the difference between a want and need, think of a need being something required for survival. Needs are water for drinking, food to eat, clothing to keep you warm, and shelter to live in. These are different needs and wants examples.
On the other hand, a want is everything else. Wants are there to make life a little more enjoyable.
And, we should all be enjoying our lives.
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However, some people think cell phones, massive homes, gym memberships, cable, going out to eat, and so on are all necessary. But, they really aren’t. If you cannot afford to save money or find yourself going into debt for your wants, then you need to start cutting these items out of your budget and your life, at least until you get your financial situation and spending under control.
It is normal to want things, and it’s not a bad thing.
You may want to take a trip around the world, get the latest iPhone, and so on. Whatever you want, though, be realistic and first figure out if you can afford it. If you can’t afford it, then stop before going any further. Remember, it’s just a want!
Learning to make better choices and to differentiate between wants and needs will help you stay out of debt and reach financial freedom sooner. Learning how to control your spending will help you for years into the future, even as your income grows.
By realizing what are wants and what are needs, you’ll be able to cut some unnecessary spending and improve your financial situation.
Here is how you can lower your spending by telling the difference between wants and needs.
Be happy with what you have.
If you’re reading this blog, then you probably have a better life than many other people in this world. It’s important to realize that not everyone has access to a computer, an internet connection, or a comfy spot to read from.
So, the next time you think that you can’t survive without something, be honest with yourself about whether or not that’s actually true.
This doesn’t mean that you can’t enjoy life and have a good time.
The power of frugality means that you can still live a great life while on a budget. Money doesn’t have to dictate how much fun you have and neither do confusing wants with needs.
There are plenty of ways to live an awesome life while saving money. Yes, you can still see your friends, have fun with your loved ones, and more – all while staying on a realistic budget.
Don’t let your needs turn into wants.
One of the problems in understanding wants and needs is realizing that sometimes our needs can cause us to spend more than we should, meaning needs can turn into wants.
Here are some example of basic needs turning into wants:
- Water- To stay hydrated, all you need is water. However, this need can turn into a want with things like bottled water, soda, coffee, etc.
- Food- Food can come in many forms, and the healthier the better. But, going out to eat all the time turns this need into a want and can cause you to spend more than necessary.
- Shelter- The place you decide to live doesn’t have to break your budget. You can rent a room from someone, live in an apartment, a tiny home, a mobile home, etc. But this need becomes a want with overspending and thinking you need something way above your means.
- Clothing- Clothing needs are things such as pants, shirts, and underwear so that you can go out into society and not be naked and put in jail. You can get affordable clothing by shopping at a thrift store (such as Goodwill or Plato’s Closet) or buying items that fit within your budget. But, wants are expensive clothing and shoes, such as Louis Vuitton, $10,000 suits, etc. You don’t need these items in order to survive.
Think before you buy.
Before you buy something, you should stop and think about whether the item is a want or a need.
You should ask yourself questions such as:
- Do I need this to survive?
- Why do I need or want this item?
- Do I already have something similar?
By first asking yourself these questions, you’ll waste less money and even prevent clutter from taking over your life.
Wait before you purchase.
If you are still confused about whether or not you need something, then I recommend going home and thinking about the purchase for at least a day. If it’s a really big purchase, then perhaps wait at least a week.
Doing this will allow you time to research the item and if you will actually miss not having it.
In most cases, you’ll probably forget about the item and end up not purchasing it.
Evaluate what you’re currently spending money on.
Most of the things you are currently spending money on are probably just wants. This is even true if many other people have it, think latest cell phone, new car, etc.
So, if you are trying to cut back on your budget, then you may want to get rid of some “wants” that you already have, such as:
- Cell phones
- Internet
- Cable
- Netflix
- Gym membership
- A car
- Toys
- Going out to eat
Now, some of these things, like the internet or cell phone, are much more important to those who need these things in order to work. The key here is to evaluate what you actually NEED.
Spending on wants is okay. However, it’s all about being realistic with your spending and your income. No one should go into debt for something they don’t actually need in order to survive.
What are some example of wants?
Examples of wants include things like extra clothing, travel, entertainment, deluxe cable package, and more.
Sure, they are nice to have, but you may able to cut back so that you aren’t going into debt.
What are some example of needs?
Examples of needs are more things such as your housing cost, car insurance, a basic phone plan, toiletries (such as toilet paper), health insurance, medical care, transportation costs, and more.
What is the difference between wants and needs?
When determining what are wants and needs, you will want to think about tomorrow, think about clear needs such as healthy food and toothpaste, as opposed to things such as soda.
Do you understand the difference between wants and needs? What wants and needs do you have in your life?
Leave a Reply
I think contentment and comparisons are important factors that help you to either succeed in saving money and not confusing wants versus needs, and failing to get ahead by wasting money on things you think you need. If you are able to avoid comparing yourself to others and what they have, and find contentment in the small things and what you already have, then you will be able to succeed with your money and not fall into the trap of debt.
Yes!
I think your tip on waiting before making a big purchase is so important. There are so many purchases (including my house!) that I could have saved tons of money and headache on by just waiting it out and giving myself more time to think it over. It’s amazing how little we need to survive, yet how much we can waste on things we “think” we need!
Yes, waiting can save a person so much money.
Needs is when you really want something for e. g water, food shelter, clothing ,housing.
One more need that, in my perspective, must be factored in is healthcare. And that takes resources, especially in the United States! In some cases, and for many people, medical care has become a luxury item unfortunately.
That is so sad to think about. Healthcare should not be a luxury.
I struggle with this in regards to fixing up my house. I like to paint & fix things up, though most of the projects are cosmetic & not needs, like painting my front door. But I also try to rationalize it by thinking that all home improvements also boost the value of our house when we’ll need to sell one day, while also making my present day surroundings a lot nicer. And I love to do painting projects and I do keep on a budget, but I still feel guilty sometimes spending $ on them when I already have a roof over my head and don’t really “need” to do it and it instead could go into retirement savings.
It’s all about a healthy balance 🙂
Great article! This is an issue that a LOT of people have and struggle with on a daily basis. Far too often people buy what they want and ignore things they need to do like save for an emergency, big purchases, and retirement. Definitely agree with waiting before you purchase. Impulse decisions are never a good thing and on the spot it can be difficult to determine if you really need it or just badly want it.
Thanks Alex!
This mindset is HUGE in helping save money.
With any larger purchase even small it’s so important to really think and decipher if it’s a need or a want.
Yes, definitely!
Yes, definitely!
Yes, a cell phone is a “want” for most people.
Yes, minimalism all the way 🙂
Yes, I agree.
If you’re stuck on whether something is a want or need, try waiting a week. Putting a purchase on hold is one of the best litmus tests for whether it is truly necessary. Wait a week, if you still think you need it, then it might actually be something you should purchase.
Yes, definitely!
Yes, asking yourself that question can save a lot of money!
I’ll be honest. I have thousands of dollars in want items that I have purchased. But over a long period of time. In a consumer based society where every time you turn a corner you are hit in the face with an advertisement for an unnecessary product, it is hard for most people to not make at least a few impulse purchases every week.
I have learned to prioritize those fewer select expensive purchases and completely ignore the smaller everyday wants. That is how we have prioritized the remodel of our home (which has earned us significant equity). It also shows that there is a balance between cost and quality. My computer is 7 years old but is still just as fast or faster than the brand new computer that my office purchased me. It was twice as expensive as most of the computers my friends purchased in college but they are on their 3rd cheap computer at this point.
Sooo much yes on the point about needs becoming wants. I think too often I’m tempted to go ultra-frugal/cheap with my money-saving ideas to the point where it’s just not worth it.
I’ve been guilty of that too. It’s all about balance!
Yes!
Michelle, I think this is an excellent post, that many people struggle with. Differentiating between wants and needs can be tough, and the line often gets blurred. To be good with your money means to be disciplined, while still having a good balance of wants vs. needs. Great, thoughtful post!
Thank you Ricky!