“I want, I need, I have to have” has often been my shopping mantra. It’s also been the best way to blow up my budget. While it should be easy to tell the difference between wants and needs, that isn’t always the case. Anything you need to survive is a need, obviously, water, food, clothes, and housing. But what about that GR8 pair of designer shoes? That new smartphone? They can be needs too, right?
Why Is It So Hard to Tell the Difference Sometimes?
Your brain can easily trick you into thinking that a want is a need, and that, friends, is the problem. You have a laptop, so you convince yourself it will make studying or working from home easier. It’s easy to say that 50% of your budget should go towards needs, 30% should go to wants, and the remaining 20% should go to debt reduction and savings. That still leaves us trying to decide if Internet access is a want or a need.
How to Tell the Difference between Needs and Wants
This brings us to the heart of the matter. Wants and needs don’t always fit into neat little boxes. For example, while food is a need, your entire grocery list may contain both wants and needs. Bread, eggs, milk, all needs. Cookies and potato chips? Those are wants.
Balance Your Wants and Needs to Balance Your Budget
Learning to tell the difference between wants and needs will give you more power over your finances and budget. You’ll know what you are choosing to buy and can put it off if it’s not in line with your budgetary goals. And you’ll know how much you are spending on necessities. In the end, you’ll have spending habits that don’t break your budget. And, you’ll be able to get more of your wants.