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.
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.
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.
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.
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:
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..
Do you understand the difference between wants and needs? What wants and needs do you have in your life?