When Wants Become “Needs”

by Miranda Marquit · 11 comments

One of the most basic principles of successful money management is knowing the difference between needs and wants. Indeed, nearly everything about successful personal finances hinges on your ability to determine the difference between something you actually need to have, and something you merely want. Being able to draw this line is an important one, and failure to recognize the difference between needs and wants has led many into crushing debt.

The Transformation of Wants Into Needs

I think that one of the reasons our society as a whole has a hard time distinguishing between needs and wants is that we’ve become so accustomed to certain things being “normal” that we don’t even question their necessity. A prime example is a TV set. What was considered luxuries two generations ago are thought commonplace requirements for any household now.

Our increased purchasing power as a society — helped along by easy credit — has created a new “normal” that has many of us feeling as though modern life requires two cars per household, multiple computers, cable or satellite TV, video game systems and one room in the house for each child. All of this has led our society to a point where individuals feel deprived without the “basics” that we accept as a standard quality of life.

Due to this shift over the last couple of generations, we are a society that lives in luxury compared to most of the rest of the world, but believes that many of us are barely subsisting. Many of us might be surprised to take an inventory of our spending, and realize that many of the items we consider “needs” are actually wants, and that we could do quite well without them.

Super Sizing Our Needs

Even if we try to whittle out some of the wants in our lives, we might still find that we are confusing needs and wants. I’ve been thinking about this a lot as I ponder my housing situation. There are three of us in my family, and we have a four bedroom house. That’s two extra bedrooms: One room is used as my home office and for storage, and the other is guest room (since we often have company). Sometimes, we’ve even thought about getting a bigger house.

Yes, we need shelter. But do we need more of it? When I really think about it, the answer is no. While a bigger home might be a little more convenient, we don’t need a bigger house, as we have plenty of room. We get a little cramped in the dining area when we have guests eating with us, but that can be solved by building in a bay window to better accommodate us; there’s no need to buy an entire house. We’d be better off saving that money and doing something else with it, but mistakenly thinking the bigger house is a need is easy.

When it comes right down to it, there are a number of ways that we have come to expect a certain level of comfort and a certain number of material possessions to indicate success in life. However, if we took some time to really evaluate what’s important to us, and what we truly need, we might find that many of our “necessities” really aren’t so necessary.

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{ read the comments below or add one }

  • MommaYemaya says:

    You should try telling the school nurse that you don’t have a second car, and that she will have to wait for your husband to arrange to leave work and drive 35 minutes to pick up a sick high school child.
    After asking where you are 4 times as if your answer was going to change, she then tries to get you to agree to let one of the child’s friend’s parents that you do not know, pick the child up and bring her home. (Because that’s safe!) After you refuse, she calls you a liar, insists that you have a second car and are just too lazy to drive to the school. THEN proceeds to try to get your child to ‘confess’ to having a second car at home.
    Sometimes living within your means makes you feel like you’re doing something wrong, or that your a horrible parent because your 15 year old is sitting at the school for 35 minutes waiting to be picked up by her working father.
    We’ve worked hard to change how we manage our money, and it’s a real blow when someone treats you like a criminal or a liar for not having what they think you should because ‘everyone else does’

  • Allen says:

    The reality is wants and needs are not black and white. There is a continuum from the most urgent needs to the mildest wants, and everything falls between those two ends. I think everyone draws the line, maybe daily, on what they get and what they pass up. Lose your job the line moves down, get a big bonus, the line moves up.

    Its not hard to push the line down, but it just takes a conscious effort, and there is certainly nothing wrong with rewarding yourself with some nice wants now and then if you can afford it.

  • vickie says:

    I learned a lot visiting my friends in Europe. Smaller cars and living spaces are the standard there. Our cars and houses are simply too big. I’ve learned to say “Do I need it or do I want it?” That’s saved me more money than anything.

  • Elton Sites says:

    I definitely agree. People need to know what is their needs and not just based their decision on the norm of what is needed. For example, do a newly wed couple really need a fridge if they both working? They can just drop by at the groceries before going home and buy the things they need for dinner and breakfast.

  • JC says:

    Not only must we know the difference between needs and wants, but we must also be honest with ourselves about ‘why’ a purchase is a need. Do I need the item for my own reasons, or do I need it to impress my family, friends, & neighbors … or maybe just to keep up with them?

    To be fair, we get indoctrinated into that at a young age. A kid gets teased for not having the right pair of jeans, and then fights that feeling for a number of years. At some point, you realize that none of that stuff really matters. Ahhh … but without that pull of buying the latest and greatest, where would the marketing industry be?

  • retirebyforty says:

    We live in a 1,000 sq ft 2 bedroom condo and soon will be joined by a little one. We are not moving though. It’s going to be tight, but I think we’ll adjust. When I was a kid, our family of 5 did just fine in a 2 bedroom apartment. A lot of the time, we even had less space that than.

  • L. Marie Joseph says:

    They say “a luxury once sampled becomes a necessity”

    I noticed once people see the inside of a nice big house they automatically see themselves living in it. Same as shopping, same as test driving a car

    I say avoid such toxics or have better discipline.

    • KM says:

      Discipline is a huge factor. I see a lot of people around me lack it. Granted, maybe it’s just easier for me because I simply don’t want that many things, but it just seems to me that people blame “addictions” for their absolute necessity to have a Starbucks coffee every single morning or get a weekly manicure from a salon (seriously, can’t you cut and paint your own nails? it isn’t that hard).

      Technically, the only necessities we have are food, water, and shelter. Everything else is divided into necessities to live in our society: car to drive to work (because let’s face it, you can’t walk or bike 30 miles if your job is far and there is no public transportation or carry a heap of groceries on your bike), insurance for said car, cell phones (even if it’s just for emergencies when you are on the road or for someone to reach you in an emergency), etc; and things that are just the cherry on top: a nice car instead of just anything that will get to you to your destination, a smartphone instead of just the basic, your Starbucks fix and weekly salon visit, dinner out, etc.

      I would say the true necessities you shouldn’t skimp on (don’t starve yourself just to save for a nicer car), cover your necessities to live in our society, and indulge in the cherry on top section once in a while if finances allow it.

  • Infinite Banking says:

    I think in the states we have a good deal of wants that are needs. Especially around this time of year. I know people are strapped, many of them, however I think a better solution is to change the way you spend, not just stop spending at all.

  • Tracy O'Connor says:

    I think you’re right Miranda, it’s so easy to let luxuries bleed into needs. It’s wise to stop and think about any new purchase that we think we need. Of course, you can take this to the extreme and deny yourself all sorts of little things that make life more convenient and comfortable, so some balance is necessary.

    What drives me up the wall is people trying to save 2 or 3 bucks here and there on coupons and other deals but need a giant SUV for carting around 2 kids in the city or a large house. I don’t know too many people going broke buying full price cereal, I do know many who are because they simply bought more house and car than they need.

    • radioactivecat2010 says:

      I agree with this article that people find it hard knowing what a want is and what a need is though. I see it from a different perspective however, I do not think some of these people have ever experienced what it is like to not be able to meet the even basic nessesities they are so used to just being able to swipe a card and they have it. And I think that is really what makes it hard for some, not all people to know if it is really a want or a need.

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