Easy way to distinguish wants from needs & budget better in 2021

06 January 2021

Easy way to distinguish wants from needs & budget better in 2021

The last post on budgeting was so successful that more on budgeting had to be written! If you are a regular reader of our blog, you have already read the post about top tips for setting financial goals, where you can follow the eight steps to set your financial goals and plan for a brighter financial future, but it was only the beginning.

So before we talk about more budgeting for 2021, let’s focus on a fundamental dilemma that most people their whole life: WANTS vs NEEDS.

Desire or necessity? Do I want or do I need?

And so? What do I do next? Today is the day to learn the difference between two fundamental concepts: WANT vs NEED. The idea of WANTING is usually related to desire, which is good to have but is not essential for survival. The notion of NEED involves necessity, something we need to survive.

Understanding this will help anyone make proper and conscious money decisions. “Hm, but does this apply to me?” You might say. How am I going to apply this in my everyday life? Keep reading.

Practising the way!

Living on a budget usually helps understand the difference between wanting and needing. Imagine going to Kmart to buy an air fryer... & all of a sudden you’re holding:

a magazine $5.46

a painting $12.50

a stamping set $5.50

a hand cream set $3.99

a pair of sneakers $18.99

& cycling shorts $9.99

All seem like great buys, and you are happy that you found all these things for such a great price, right? No. Not right, in fact, you’re not even holding the air fryer yet, which is the whole reason you went there in the first place. And the worst is the total of $56.40! Around the amount you’d thought you’d spend on the air fryer. Not looking good for your pocket and the internal battle begins. 

Yeah, bro... this is a lot of money.

The painting I can resell it or exchange if I no longer want it.

I really need some sneakers.

The hand cream is so cheap, and it is always very good for the skin.

If I bought the shorts I would start to go biking... would be great for my health!

Do you want it? Yes, everything.

Need? Only the air fryer and sneakers (let’s say the ones you have have a wee hole in it).

You can read the magazine online, you have hand cream at home, so many gym shorts, you’re not sending any letters anytime soon & WHAT WALL WAS THE PAINTING FOR? Lol.

What if I can?

You may also think you can, right, especially if the money is in the bank account. But not if you think about your monthly income and the expenses you’ll have in the future. Having the money to spend now does not mean that we will have it for the “need” later. This awareness can be slowly acquired and remembered, day by day.

What to do next?

The next step is to apply the understanding of the difference between needs and wants, which also explain the difference between consumption and consumerism. So conscious consumption becomes the focus of our attention.

The solution? Basically budget to buy!

Do some research, spend wisely and mostly on needs, saving ahead. People who follow these three pillars live more harmoniously financially because this is how you stay on budget. However, remember what is important to me may not be relevant to you. So value and practice financial education. Now that you know the difference between needs and desires, be sure to share this content, so you can help someone who needs a tip. 

What if I already went to Kmart and bought all my wants

Things already got a bit out of hand? It’s okay, you are learning. And we can help. Jump on the loan page and apply now for some relief.

By Kevin Bacon