The difference between defining something as a need or a want can mean the difference between a blown budget or a healthy savings account.
These terms seem so simple and easy to understand, but all too often, we blur the lines. When you say you “need” something, it should mean that you literally can’t continue to function without it. Unless we’re talking about the need to eat, be clothed, stay healthy, and have a bed to sleep on, most of the “needs” in life actually fall under the category of “want.”
It’s funny how we reason with ourselves until we’re convinced that something we want is actually something we need. I need a new purse for summer. I need a manicure. I need new shoes.
In this case, our definition of need becomes anything we want desperately enough that our personal happiness will be hindered without it.
This is a cultural trait; we feel the need to measure up to those around us, to keep up with the current trends, to have the coolest car, the nicest house, or the most elaborate wedding. Although there’s nothing wrong with gratifying some of our wants as our circumstances and finances allow, it’s dangerous to categorize every new thing we want as a need.
Before we know it, our budgets grow, then blow; our credit cards are maxed; and we can’t afford our lifestyle.
Learning to distinguish between wants and needs is a complex skill that takes continuous reinforcement, especially when immersed in our materialistic society. With that in mind, here are three questions you should ask yourself when deciding whether something is a want or a need:
1. “First of all, do I need it?”
There’s a category in my budget for “miscellaneous needs.” This category is purposely vague to account for needs that arise, but don’t fall under any other budget category.
It would be easy to start using this as just another excuse to blow money — but the distinguishing factor when determining whether to use this category or “fun money” is whether the item is an actual need. If the answer is yes, move on to the next question. If it’s no, skip ahead to the third question.
2. Do I need it now?
This is where planning comes in. Yes, you may need something, but you might be able to wait a few weeks or months to purchase it.
For instance, I need new running shoes since my current shoes are worn out, which puts me at a risk for injury. I don’t need them today, but I’ll need them before I start putting in more mileage this spring. This is a necessary purchase I can plan for, instead of something I need to satisfy right now (even though I may want to).
Learning to put a maturity and expiration date on our needs is important for budgeting effectively. If emergency needs come along, it’s helpful to have funds designated for them, but we should be able to plan for the rest of our needs.
3. If I don’t need it, why and how badly do I want it?
Sometimes I’m afraid to admit I don’t need something, because I don’t want to feel deprived. Well, the truth is, I don’t have to deprive myself of all my wants. Life would be pretty depressing if we never spent money on things we enjoyed. But it’s also a good idea to ask why and for what purpose we want things.
If the answer is too often for personal enjoyment, this is spending we may need to work on keeping in check. Sometimes we want things for more altruistic reasons, and sometimes we want things for personal development. These are wants we can allow to be fulfilled more frequently than ones that only benefit ourselves.
What’s one “need” you spent money on recently? And one “want”?