Want versus need boils down to basic economics. The difference should be obvious, but reading articles online about finance, it is apparent that many people can not grasp the meaning of either one or both. This could be attributed to ignorance (completely unaware of the effect on their lifestyle) or defeat (aware of the impact but feel powerless to do anything). The end result for both is the same, a big impact on their financial future. Here is how you can differ between the two and take steps to correct past mistakes.
Want versus Need:
A “need” is defined as something that is needed to survive. The first thing I think of is food. You need it to live. Shelter, Water, Air. All these are things you actually depend on for life to go on. Of course there are many layers to this. For instance, we know food is essential for life. One might argue that you need meat (maybe not filet mignon). A vegetarian would oppose that as they are living proof that you can exist without meat. This does not take away from the fact that food as a whole is a necessity.
A “want” on the other hand is defined as something one desires. It is not something that is necessary to sustain life. Lusting after things is something that we all experience at one point or the other. You might want a new car or shoes. They might or might not be attainable, but they are not crucial things. You won’t die if you don’t get them. That might be a bit difficult to make kids understand of course. I’m sure a lot of parents are familiar with kids crying and saying things like:
“I’ll die if l don’t have the new iPhone, X-Box, ” and a million other things.
Related Reading for youngsters (affiliate links):
While we are quick to assure the kids that they will not die without those playthings, it’s amazing the number of adults who can not show the same strength when it comes to their own spending. There comes a time when you have to start saying “NO” to yourself when the urge strikes to pull the trigger and spend.
Say no to that phone upgrade and save hundreds of dollars.
Say no to the concert tickets that cost $100 or more.
Say no to a new car. That new car smell goes away pretty quickly and you’re stuck with $ drained out your finances.
Say no to that expensive lunch or dinner with your rich (at least on the outside) friends.
Say no to opening another store charge card. It’s easy to get sucked in. While you’re at it, say no to the “sale” items in the department store. I know it’s a hard one because shopping is a pastime for most people. It’s a trap designed to part you from your money. Your big screen TV is just fine, no need to upgrade to the new 4K. Trust me, you don’t want to see all those actors that clearly. They have zits just like the rest of us, which takes away some of the mystique.
Want versus Need: Compromises
Once you start to differentiate between your needs and wants, it becomes easier to save your hard earned money. This can only lead to better decisions. Your want versus need might be to spend $300 on a solid washer instead of $950 on a fancy top loader if you consider that a need. This will effectively impact your finances in a very positive way.
You could start a “Fund Jar” with all the extra money and use it to pay down debt like a school or car loan. A friend of mine carries around a picture of her dream house in her wallet. Whenever she feels the need to spend foolishly, she takes a look at it and this helps her focus on the big picture.
Have you learned to say “NO” to yourself? How do you handle your want versus need dilemma?