Need vs Want.

We may not think about these too much because often we confuse what we need to be what we want. Would you agree? Although these are two different things, a lot of us like to pretend that they are the same, and this unconscious pretense has continually kept many in a financial rat race.

If you don’t know the differences between needs and wants, you’ll keep struggling financially. So, get to know the differences, apply them in your day to day life, and you’re well on your way preventing financial struggles in your life as well as building a lasting wealth for yourself and more.

WHAT IS A NEED?

To put it simply, a need is a resource necessary for basic survival. Anything that you have to have is a need. A need may apply to you as a person or to other things.

Since we’re coming from the perspective of wealth building, we’ll focus more on needs as they relate to money.

How does a need apply to you as a person?

Your needs are whatever resources are necessary for your survival. This means that if you don’t have your needs, you’ll cease to operate efficiently and may even die as a result. Things like food, water, shelter, etc, are some needs that apply to you as a person. Spending money on the right amount of your basic needs is a viable way of building wealth.

Luckily, delicious food could be classified as a need.

WHAT IS A WANT?

Something that you’ll like to have is defined as a want. A want does not affect your optimal performance as a human being, which is to say that you can survive comfortably without your wants.

Spending money on stuff as influenced by the modern market is not always a good idea. If you keep up with this, you’ll have a tough time building wealth for yourself.

According to an age long report that still holds true till this day, the human spending habit is continually deteriorating. It’s been verified that we spend money on stuff we can do without even more than we spend on things we need, and the modern marketing tactics are solely responsible for this.

The modern market has discovered highly effective ways of breeding false consciousness in the human mind. This makes the human mind perceive happiness when actually, there is no such thing. This false consciousness induces people to buy things that don’t support their basic existence or make them happy.

DO YOU SPEND MORE MONEY ON NEEDS OR WANTS?

In order to ensure that your wealth building journey will be a success, you have to understand that the concept of “need vs want” is relative. Circumstances and frames of reference are important in determining what stands as a need or a want. Owing to this fact, you can say that what works as a need for you can be a want to your next door neighbor.

How then can you tell if you’re spending money or needs or wants? It is understandable that there are times it is hard to differentiate between these two, but if you put a good measure in place, you can easily tell if you spend more money on your wants than on your needs.

Here are three simple questions you can ask to find out how you really spend your money.

  • Do I find it hard to recall some transactions I made?
  • How often do I spend outside my budget?
  • How often do I “need” to borrow money?

If you find it hard to recall some transactions you’ve made, that means those transactions may not be “memory worthy” and as such can be classified as wants. Also, if you spend money outside your budget more often than not, how will you cope? If you spend money on things you didn’t budget for, you’ll probably end up borrowing money to take care of your needs; and that is nothing but a misplaced priority.

The concepts of needs vs wants may be relative, but they have the same effects on everyone. Understanding them is just the beginning of your journey towards wealth building.

Stick around for more money saving and budgeting hacks this month of October!