Identifying (Differentiating) Needs and Wants

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In the past weeks, I have had to explain to blog readers the concept of Needs and wants, as a result of been a key area were we can cut down on expenses so as to achieve a good savings habit.

Yes Saving Habit, savings is a concept that needs to be learnt and this concept will be extensively addressed in our next post. However, we may not have a full understanding till we have been able to separate and identify our needs from our wants.

Needs can be defined as must have, something you can't do without, they are essentials and without which daily activities can be challenging. While Want are non-essential expenses but make our life more pleasurable, enjoyable and adds comfort to our existence, but we can live without them. Allow me to categorize our Basic Needs into the following headings which are:

1)    Housing, this should not be tacky, but decent and nice.

2)    Food, I recommended a good healthy meal

3)    Clothing, having appropriate cloths for all occasions.

4)    Basic toiletries.

5)    Means of Mobility

Asides the ones mentioned above, we have some other Needs that are paramount to us on individual basis, as this is personal and cannot be generic in any form. It could range from a need for higher education to a new car etc.

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One thing I need to stress is one man’s want is another man’s need, and we need to understand and digest this fact as we are the key factor in deciding what a “Need” is or what a “Want” is

Needs comes as basic first, then we make it luxurious by adding wants to it. For example living in a big house, big brand designer clothes, shoes, bags, fancy cars, consistently eating out, video game, the list is endless.

Can you be truthful a bit with yourself, look through the things you have bought in the last three months and diligently access the wants and the needs among them? The truth is I have spent some money myself on wants even though I am a Personal Finance Coach. So be real and make accounts.

It will be much easier for us to discuss the subject of savings, when we have block out loop holes and leakages.

Again it comes down to making brilliant financial decisions and been able to stand by our decisions

There is absolutely nothing wrong with “Wanting” things, we will keep “wanting” so many things as our wants and desires are insatiable couple with the fact that we are living in the age of unrealistic media images and mouthwatering adverts.

So I must stress the need for us to be financially discipline and make purchases base on Needs and not on Want, so before you make your next purchase evaluate and justify the purchase.

I will advise you to have some allowance for “want” at most once a month, never make it an all the time affairs as it will never make saving easy to achieve. This is just to help us establish and strike a balance between Slavery and Saving. And the beautiful thing is there is always alternative to that Want of yours and you can even get it cheaper at the next shop.   

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Show me a man that can differentiate between his wants and needs and make appropriate decision and I will show you a man that is frugal enough, to achieve financial freedom.

     On our journey to Financial freedom we will have to make quality decisions at every point in     time, and as the saying goes “we are a sum total of our previous decisions’ whether good or bad”.

   So I implore you to make the right choices today for a financially free tomorrow.