Distinguishing Between Wants and Needs

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Need: Something you have to have
Want: Something you would like to have

The difference between a need and a want is pretty simple — until you set yourself loose in a store. Double chocolate chip ice cream? It's a food, so mark it as a need. That designer t-shirt that fits you perfectly? Well, you need more shirts, so why shouldn’t it count, too?

Tally up the damage caused by a few justifications like these, and suddenly you've spent far more than you intended.

What's the solution?

A better understanding of what a need really is.

Defining Needs

In actuality, you only need four things to survive:

  • A roof over your head
  • Enough food and water to maintain your health
  • Basic health care and hygiene products
  • Clothing (just what you need to remain comfortable and appropriately dressed)

Everything that goes beyond this — a big house, name-brand clothes, fancy foods and drinks, a new car — is a want.

Does that mean that you should only buy the things that you need? Not at all. Life is meant to be lived, not survived. Treat yourself to some wants along the way, but do so when you can afford to, and enjoy those wants as the extras that they are.

Appreciate What You Have

Once you become better at differentiating between wants and needs, you'll probably see that you've been able to fulfill more of your wants over the years than you realized. And that can be a major turning point.

When there are things that you want to buy or do that you can't currently afford, it becomes all too easy to focus on those things to the point of overlooking all the many things that you do have. Don't trick yourself into feeling deprived when you aren't. Take time to reflect on all the ways that you've been blessed.

 ​Then, decide what's really important to you, and go after it. So many people talk about wanting to do this or that, but they never actually try to make it happen. Be the person who makes it happen. Come up with a plan, and act on it. Even if it takes you a really long time, just working towards a goal is empowering. It makes you feel capable, instead of deprived; it makes it easier to tune out all those things you don't need, and it puts you in charge of your where you'll go next.

Use this financial goals worksheet to get your goals on paper. Then, check out this article on how to fit big dreams into a small budget.