Wants versus needs filter
A frequent question I’m asked is: How do you decide if something is a need or a want?
Simply, a need is something that is essential for living; a want is something that is discretionary, or nice to have.
Why do we care about identifying needs and wants?
Needs set the foundation for creating safety and comfort. They make it possible to feel secure. If wants are too prominent in our spending plan, they crowd our needs. When our wants interfere with our needs, their brief joy leaves us feeling the opposite of comfortable – they leave us scrambling, perhaps relying on credit, dipping into savings, and worrying about our future.
We can justify almost anything as a need. On my tracking sheet, I have a column to identify wants and needs. Often, I find myself writing out the groceries I bought and asking, “were those really needs or was I just shopping hungry?” It’s easy to quickly identify groceries as a need. But, not everything I buy is a need. For example, LaCroix and Spindrift sparkling water – definitely a want. The water from my tap is the need. We need water. We don’t require bubbly water. When I’m thoughtful about my spending, I can recognize what is a luxury and what is a necessity. Recognizing this distinction, and making related behavioral changes, is a way to become in control of our choices.
The example with water is minor. However, this spending on wants disguised as needs can happen on a more costly scale in different categories. We need transportation. We don’t need a luxury vehicle. Our children need stimulation. Our children do not need costly activities. We need clothing. We don’t need new clothing regularly. Travel for work is a need. Travel for fun is a want. There are numerous other examples.
Becoming an objective anthropologist of your own spending and properly categorizing your purchases through tracking is critical. If you find that your wants are getting in the way of your needs, reassessing what you are considering a want and a need is important.
If there are not resources for all the needs and wants, needs take priority. Always. If we were to find ourselves suddenly in an emergency, or even wanting to reach a certain goal, like paying off debt or saving more, we would cut wants from our spending plan. We must be assured that our essential needs are covered.
Having this awareness clarifies what we care about in life. If everything is a need, nothing is a need. We truly only need a few things to live.
Not only do we think about our present-day needs, we must also plan for our future needs. We must set ourselves up to be able to also cover our needs 5, 10, 20, 30, and 40 years from now. If our wants interfere with that, we aren’t ensuring our needs will be met which will cause future discomfort.
Sometimes it’s difficult to distinguish our wants from our needs, but it is important to understand so that you can make modifications to your spending plan. Go through your spending plan and try to categorize them as such. Do it as objectively as possible. One question to help with objectivity is to ask: Is there another way to meet the purpose of this expenditure? If there is, it is probably a want. With the water example: I can get hydrated without buying sparkling water, therefore I know it’s a want.
Having wants built into your spending plan is absolutely okay. In fact, when there is room in your spending plan for them, you should have them. What is life if we don’t have some of the things we want? We should. But we’re often confused (or rather, marketed) into believing we need a bunch of stuff we don’t, and that takes away from what we really do need. If there isn’t room in your spending plan for wants right now, really appreciate meeting the needs and look for ways to accomplish the wants without borrowing from your present and future needs.