Inside: Learn how to differentiate wants vs needs and how knowing the difference can impact your life.
How many times have you heard (or perhaps said) “I need that” when it was really a want vs a need?
While there are some things in life that you simply need to thrive such as food, water, shelter, and clothing, many things are simply wants.
It can sometimes be a little less obvious whether things are true needs or just nice-to-haves.
We can easily find ourselves feeling like we need something that, when you really break it down, doesn’t actually fall into that category.
Companies spend millions, if not billions, of dollars each year convincing you that you need whatever it is they’re selling through aggressive advertising – and it’s nearly impossible to avoid exposure to those messages.
Fortunately, with a little critical thinking and introspection, you can rise above the temptation to buy things you don’t truly need on a whim and filter out the wants from the needs.
And by doing so, you’ll empower yourself to make smart financial decisions, avoid distractions, and find contentment in the things you already have.
How can I differentiate wants vs needs?
While some items can clearly be categorized as a want or a need, most of the purchases we consider fall into a bit of a gray area.
Fortunately, there are a few simple questions you can ask yourself to determine whether or not something is truly a need or not:
Is it a luxury or a necessity?
This question can be asked for virtually any purchase and really help you understand if something is a want or a need. While the question itself sounds simple and straightforward, it’s really about the thought process that follows.
At face value, a necessity would be a ‘need’ and a luxury would be a ‘want’.
But these two categories aren’t mutually exclusive. For example, clothes are a ‘need’ – but a $200 pair of designer jeans can’t be justified as something you need.
You need food to survive, but that doesn’t mean you should constantly splurge on expensive ingredients or overpriced take-out.
You need shelter, but if that luxury apartment isn’t in your budget, you should probably readjust your expectations and find something that meets the need without spilling into the ‘want’ category.
Depending on where you live you may need a car to get to your job, but taking out a loan on a brand-new car with a hefty monthly payment to go with it isn’t a need. That’s a want.
What consequences will I face if I don’t get it?
If you’re struggling to determine if something is a luxury or a necessity, this can be a great follow-up question to ask yourself.
When you truly need something, you’ll face some pretty unfavorable consequences if you don’t get it – things that can impact your health and well-being.
If you live in a cold and snowy climate, you need a warm coat to survive the winter; if you don’t, you’re likely to be quite uncomfortable or possibly even get sick. And if you’re sick, and you don’t get the medical care you need to recover, the consequences can be dire and long-lasting.
The fear of missing out
Sometimes, it might feel like the consequences are serious for not getting something you want. Your favorite musical artist is playing in your town, and all of your friends are going – and it feels like you need to be there.
But really, the only consequence you’ll face from missing out is a sense of disappointment that you’ll get over in a day or two’s time.
To be clear, needs vs. wants aren’t the same for everyone. Something that’s a need for one person can be a want for another – like a vehicle.
If you live in a walkable community, work from home, and can take public transit to reach the things you need, a car is a want, not a need.
On the other hand, if you live in a sprawling suburb with no access to public transit and work at a job that’s ten miles from your home, a car becomes much more of a need.
Can I truly live without it?
This is another great question to ask to get to the core of whether or not something is a want or a need.
Simply put, needs are things that are required for your survival. A roof over your head, heat during the winter, nutritious food to eat, and medicine when you’re sick are non-negotiables.
That trip to the Bahamas? That book you’ve been dying to read? A new pet? A gym membership? As nice as they’d be to have, they certainly aren’t required for you to survive. You can live without them.
Why is it important to identify wants vs needs?
There are a few reasons you’ll want to know how to separate your wants from your needs.
1. Avoid debt & living beyond your means
Differentiating between wants and needs is critical when it comes to maintaining a budget and saving for the future.
Spending money on every want is financially irresponsible, and unless you have a significant amount of money, is a quick way to land yourself in trouble with a lot of debt.
By spending money on the things you need and taking a more measured approach to your wants, you’ll be able to save for the things that really do matter – like retirement, a new home, or a rainy day fund for emergencies.
Don’t get caught up living a life you can’t afford. Buying into the I deserve it mentality (regardless of whether or not you have the money for it) can leave you stressed out and overextended.
2. Teach your kids good spending habits.
If you have children, you know they watch, and often imitate, everything you do. Teaching them how to live simply in a culture focused on consumerism takes thought and effort.
Not only do they learn by the example that you set, but also through conversations you have and what you teach them.
If you want your kids to learn how to budget, start early. Talk to them about needs vs wants and give them a chance to practice their developing money management skills.
This will help prepare them to make better financial decisions when they grow up and eventually leave home.
3. Helps you to have a happier life.
Most importantly – and most surprisingly to some – learning how to differentiate between wants and needs can help you live a happier, more content life.
Recognizing the difference between the things you need and things that are simply nice to have can help you appreciate what you do own and cultivate a sense of gratitude for the things that are already present in your life.
And with practice, you can curb the constant pursuit of material things by understanding that not all wants need to be fulfilled in order to live a good life.
And last, but certainly not least, focusing on your needs instead of your wants is a great way to reduce waste and live a more sustainable life.
By taking a more intentional approach to making purchases, you’ll find far fewer items fall into the “needs” category than you may have previously thought.
How to avoid overspending on wants
We live in a world focused on instant gratification. It takes thought and intention to not go with the flow.
But by getting very clear on what falls in the wants category and therefore isn’t truly a need is a helpful first step to take.
Check out these posts with more helpful tips on how to avoid overspending:
- 5 ways to avoid impulse purchasing
- 6 frugal living tips to save you more money
- 27 things I won’t be buying this year
How do you distinguish between your wants vs needs? Leave a comment and let me know!
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