Why You Should Understand the Difference Between Wants and Needs

There it is.

The clear, sharp, and vibrant screen from one edge to the other. The smooth surface that flows over the edges. The uniform and smooth silhouette encompassing it’s entire back.

It’s the Samsung Galaxy S8, the latest and greatest tech available in the mobile space.

The phone that everyone wants and luckily enough, it’s right in front of you because you were among one of the first to pre-order this magnificent and splendid gadget.

But let’s pause for a moment and think.

Did you need or want it?

Why You Should Separate Wants and Needs

Often times, we don’t separate our purchases into wants or needs. We usually just purchase it because it’ll be “convenient” for our lives or maybe because we simply just want it.

Especially with how easy it is to just purchase things on the internet via Amazon, eBay, and the many many retail sites out there. All of the purchases we make becomes convoluted and complex and it becomes hard to sort out whether or not you really “needed” that purchase.

Maybe after a while, we’ll soon turn into monsters who like to hoard everything out there just because it’s available. Who doesn’t like things, am I right?

Now what if you don’t want to be a monster who just collects everything you set your sights on?

Well, there’s always the option of going the other option… becoming a minimalist. To downsize the stuff you own to only the essentials.

But that’s not really fun, right? Life is supposed to be fun.

And to make it fun, we should strike a balance between both extremes. To have the best of both worlds and enjoy being both a minimalist and a hoarder.

Now let’s tie it back to our wants and needs.

Being a hoarder is just like our wants. And being a minimalist is just like our needs.

Hoarders want everything they can get their sights on, and minimalists only have things they need to have their life go on.

To strike a balance in our wants and needs and to understand whether or not it is important in your life will allow you to eliminate unnecessary waste.

Unnecessary?! Nothing is unnecessary!

Well, how about those coloring pencils you haven’t used since 5th grade 15 years ago?

Do you still need them or are you just hoarding it for an off-chance situatino that you’ll use them again?

Of course, this can sometimes differ depending on your person as wants and needs don’t always fit into nice little buckets for you.

It can’t be too simplistic, but it can’t also be too complex.

Let’s take groceries for example.

Groceries are a need because you need to eat to survive.

But the type of food you prefer to eat are more on the wants side.

Anything from fruit juice to chips and cookies are more of a want instead of a need. The difference between tomatoes and organic tomatoes show you that preferences are more of a want than a need.

Got that?

How You Can Apply That To Your Budget

Take a look at your budget.

How many of those items are wants and how many of those items are needs?

There’s nothing wrong with having a lot of your line items in your wants and there’s nothing wrong with having a lot of them in your needs (if it’s in needs, props to you!).

Now, can you eliminate your wants in order to “save more money” and allocate them for a better use?

If you can, great! If you can’t, then that’s something we have to work on (unless you don’t want to).

By being able to categorize our wants and needs into buckets, you’ll start to realize that you have more power and control on what you actually spend and how you allocate your budget.

If you’re choosing to spend your money on wants and want to minimize it, you can start not purchasing those items and allocate it elsewhere, because you already know that it’s unnecessary.

In the end, wants and needs can affect how your spending and budget will go.

But it’s highly dependent on what you want to get out of your life and your budget is typically a reflection of it.

How Balanced Are You With Your Wants and Needs?

So, how balanced are you with your wants and needs?

For myself, I’d say that I’m about 60% Needs and 40% Wants.

I can definitely improve more by eliminating the tech gadgets and dining out for lunch and dinner. I’d allocate that money into the stock market and learn how to cook more, make delicious food, and simply, live with what I have instead of striving for the latest and greatest.

JOIN THE NEWSLETTER
Join the community to receive our newsletters and insider updates on how to build wealth, travel hack, and live life simply. It's complete free and always will be.
We hate spam. Your email address will not be sold or shared with anyone else.

9 thoughts on “Why You Should Understand the Difference Between Wants and Needs

  • May 15, 2017 at 9:02 am
    Permalink

    Great thinkin’. 🙂 It took me a long time to understand wants vs. needs, and that’s why I got into the amount of debt that I had. I finally had to switch to a cash-only envelope system with a strict budget. I finally understood how I could budget only for needs first, and wants much later.

    Reply
    • May 22, 2017 at 3:19 am
      Permalink

      Thanks, Picky Pincher!

      The Cash-Only Envelope System is a great way to get started in budgeting, it’s definitely very helpful.

      Reply
  • May 15, 2017 at 5:33 pm
    Permalink

    It’s definitely a acquired skill. So much in marketing is focused on convincing us our wants equal our needs.

    Reply
    • May 22, 2017 at 3:20 am
      Permalink

      Definitely, FTF.

      It’s unfortunate how marketing works that way though. I would suggest they work on something else, but that’s really what they do, market products to people so the products can be sold and the company can turn a profit.

      Reply
  • May 18, 2017 at 11:09 am
    Permalink

    More often now, I put off purchasing things (put them on the back burner). If I already have a similar item, an alternative item, then I really don’t see the need. Or I try to assess how much value/utility/happiness it will bring to me as a major factor in buying it as well. These mental exercises really help identify wants VS needs.

    Reply
    • May 22, 2017 at 3:23 am
      Permalink

      That’s an awesome way of doing things, SMM. I kind of do the same thing with Amazon Wishlists…

      I put the items I want into a wishlist and then i revisit it after a few months. If I still want it, I’ll move it to a second list, where I’ll do another pass on a future date. If I don’t, I’ll delete it.

      Things never make it through the second list though… unless it’s a present to a friend.

      Being aware is definitely much more helpful when we start evaluating whether or not we need the item and if it is of value to our lives.

      Reply
  • May 18, 2017 at 11:10 am
    Permalink

    One thing I really like about my work is that it has always satisfied my tech addiction by buying me the latest greatest phones and computers. Knowing myself pretty well, I set up my early retirement side gigs so they’d provide the same stream of toys with OPM and not out of my pocket. That’s other people’s money if you aren’t familiar with the acronym. I can now afford as many toys as I want but they are still way more fun to play with when OPM pays for them!

    Reply
    • May 22, 2017 at 3:21 am
      Permalink

      Oooh, sounds like you have an awesome job, Steveark! I wish I had access to the latest tech everyday for work, that would be so enjoyable!

      It’s awesome that you were able to set up side gigs to help provide for the tech gadgets! I’ve been trying to set one up a well, but I’m not having much success yet.

      Reply
  • May 22, 2017 at 9:40 am
    Permalink

    Well, it does take some luck but I think the key is to try to isolate a skill or set of skills that you possess that aren’t common but taken as a whole are rare and then to find someone who needs those skills. Really it isn’t about the money so much as to keep your brand alive and your network working in case you do need the money at a future point, plus I honestly think it slows the aging process to stay mentally and physically active.

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *