“Need” – something essential for survival
“Want” – something beyond a need that makes life more comfortable or convenient
Determining what is a “need” and what is a “want” is important in looking at spending habits. Making small changes in spending habits can result in a big difference. There are only a few basic needs people have to survive- shelter, food and water, basic health care and hygiene items and clothing. However, these needs can very easily fall into the wants category (ie large house, gourmet or fast food and brand name clothing).
I am not saying people should not spend their money on “wants”. There is nothing wrong with living as opposed to just surviving. However, “wants” are the areas you can reduce expenses and increase savings. Considering whether a purchase is a want or a need will give you a new perspective on your spending. Perhaps, you may decide to reduce some of the daily “wants” to save towards something big like a vacation.
Many wants are a consequence of looking for convenience. Buying coffee and eating out are good examples. One coffee per weekday is almost $500.00 year. Grabbing lunch at work or supper on the way home adds up very quickly. Although we need food to survive, convenience food is a want.
Impulse buying is done primarily to satisfy wants. A great strategy is to use a “30 day test”. Write down a list of things you want. Wait 30 days then recheck the list to see if you still want the same things. Avoiding impulse buying can be done by leaving credit cards at home when shopping and avoiding shopping (including online) without a specific purpose.
Convincing ourselves that we “need” something and not just “want” it is easy, but really, the only people we are fooling is ourselves.