Differentiating Needs and Wants

In the past week, I have had to explain to blog readers the concept of Needs and wants, as this is 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 we will discuss more in our next post, however we will not get a grasp of it until we have been able to separate and identify our wants and our needs.

Needs can be defined as something you have to have, something you can't do without they are essentials and without which living will be very difficult. While Wants 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 clothes for all occasions, not too many.

4)    Basic toiletries.

5)    Means of Mobility

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

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

The truth about Needs is that it comes basic in the first place and 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 identify the wants and the needs and I need you to be truthful to yourself. 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 blocked out loop holes and leakages.

Again it comes down to making brilliant financial decisions and are 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 and coupled with this is the fact that we are living in the age of unrealistic media images and mouthwatering advertorials.

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 do some want sometimes at least 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 Slaving 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.   

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

 On our journey to Financial freedom, we will have to make quality decisions at every point of the way, 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 choice right today for your tomorrow.