Is It a Need? Or a Want?

We all need things to survive. We need clothes, shoes, food, a place to live, and often some sort of transportation.

Things we want, on the other hand, aren’t essential to survival. Designer-label clothing, dinners out, and brand-new cars all represent wants.

Sometimes, we get our "needs" mixed up with "wants."

For example, we need clothes that are warm in the winter and cool in the summer. Our clothes need to be of good quality so they’ll last a while, and they need to fit us. However, we may want the newest trendy jeans, expensive running shoes, or an outfit that needs to be dry cleaned after each wearing.

Here’s another example. We may need a vehicle to get to work, but we want the newest four-wheel-drive truck or latest sports car.

Since many of us have never learned to distinguish our wants from our needs, we spend a lot of money on "wants"—things that we don't really need. Here's a quick way to determine whether something is a want or a need:

• It's probably a want if:
  it’s possible to delay the purchase, substitute a less-expensive item, or use something you already have or own.
• It's likely a need if:
  you’re purchasing something you need to survive.

Knowing the difference between wants and needs puts you in control of your purchases. It also helps you:

• set spending priorities
• make wise choices about spending
• get the most value for your money
• be a thoughtful consumer
• save money

For more examples of needs and wants, take a look at Knowing the Difference Between Wants and Needs.