One of the first steps to becoming more financially responsible is learning self-control in your spending. Overspending is a common problem because people make spur of the moment purchases without actually considering whether it fits into their budget. Figuring out which products and services are necessary and what purchases are unnecessary luxuries is key. It will lead you to a happier, more fruitful life. In this article, we’ll break down what separates wants and needs.
What Constitutes a Want and a Need
At the core of this discussion, the difference between a want and a need is simple:
- Need – something you need to survive
- Want – something you would like to have but can live without
It’s easy for anyone to convince themselves into purchases that are not actually needed. As our modern lives evolve, the line between a want and a need can be blurry. This may cause you to make purchases because you think it fulfills a need and not a want. Buying unnecessary purchases is how people get into debt that can cause stress. Getting into a rhythm of weighing wants and needs before making purchases is a habit you should start sooner rather than later.
There are only a few things in life that should be considered needs:
- Food and water to maintain health
- Healthcare and hygiene products
- Clothing (the basics to remain comfortable and appropriately dressed)
Anything outside of the four things listed above should be considered a want. Some examples are:
- Living in a too-large of a house
- Replacing your cell phone every year
- Purchasing take-out/ready made meals most nights of the week
- Buying a brand-new luxury car
You can survive without these things, which is what categorizes them as wants.
It’s OK To Treat Yourself
We have broken down the differences between wants and needs. It is important to understand that it is perfectly fine to buy things you want every so often. It’s OK to treat yourself. We fully support and recommend that everyone should enjoy their lives. The key is getting the balance right. Understand when you can afford to splurge and when you cannot. A good place to start is using a budget tracker to help with your personal budgeting. Your budget should include all your needs as well as a line item for your wants.