Need vs Want

DOLLAR$ and $EN$E, November 2007, by Brian Bogaert


NEED vs. WANT 


Thanks for your letters everyone and keep ‘em coming. This article is in response to many people who wrote in about how to save some money, a topic we’ll talk about more than once!

I so NEED that!
How many times have you been walking through the Mall and you see something (jeans, shoes, a rice-cooker) and you suddenly squeal with delight and announce: ‘I so NEED that!!’ I’d be willing to bet you have tried it with your parents or grandparents or any other adult who was there with you and had ‘the money’.

Did they always buy it for you? They didn’t, did they? But…how could they NOT…I mean you NEEDED it in the worst way didn’t you?!!

The truth is, and I hate to be the one to break it to you…you probably didn’t NEED it. You WANTED it, and there’s a big difference. This is the secret to SAVING money and something many people struggle with their entire lives.

The Need List
The Need list is a lot shorter than the Want list. The Need list is also quite a bit more important. There are basic needs we all have such as air, water, food, shelter and companionship.

"I know I really want that outfit...but do I really need it?

The Want List
The Want list can go on for pages and pages and it can also change in the blink of an eye. This is why your parents will try and distract you or ask you to wait when you point out the things you ‘have’ to have because they believe that, given enough time, your Want list will change and you’ll forget about the previous things. Or they’ll ask you to pick one thing, the most important thing, and you can have only that.

Learning to manage Need vs. Want is a big step on the road to becoming an adult and, eventually, living on your own and taking care of yourself. If you don’t learn this, well… it usually has very challenging results in the future where you own fancy things but can’t afford anything better than mac & cheese for dinner. Once you start living on your own, you have to decide how much money will be required to pay for NEEDS and then how much you choose to spend on your WANTS.

Please notice I said CHOOSE to spend as that is very important. You always have a choice.

You Choose
The other thing to remember is: not only do you have choices about your Wants, you have choices about your Needs too. Although I need to eat, I don’t need to eat steak every night. I don’t need to pay twice as much to eat at the cafeteria every day as  I do to bring lunch from home. I don’t Need to buy clothes that are the most expensive because they are currently ‘in’ nor do I need to have so many of them that I can no longer close my closet. You always have a choice. Often when people get a raise in what they are paid or in their allowance, they just start buying more Wants and more expensive Needs and then they wonder why they still run out of money every month. Make one of your Needs to SAVE a bit of money every month. In the beginning, it doesn’t have to be much. As you start to earn more, put more into your Savings category. One day, when you have lots of extra, you can utilize some of your Savings to satisfy your Wants and that will be a great day!

You can have it all
Now before you think I’m a big Scrooge and no fun, you should know that I like to have nice stuff and I like to buy clothes too (guys really do although we usually won’t admit it). I just know that it’s important to take care of Needs and I can do it in such a way as to have money left over for my Wants and still put some into Savings. If I spend all my money on my Needs - sorry - no Wants for me! If I spend all my money in the first week of a month, then no more Wants (or Needs) for the rest of the month until payday. If I spend all my money on my Needs and Wants every month, I will never have any left over in my Savings for special things like going on a trip, getting a new car, buying gifts for my friends and other longer term goals that I can use my money for.

Money Tip #4
Learning to manage Wants and Needs will directly influence how much money you have and how much you need to earn.

So the next time you are out somewhere and you see something you just HAVE to have…ask yourself, “Is this a Need or a Want? If I buy this what might I be missing out on later and is it worth that? Will I have enough money left over to take care of my other Needs as they come up?”

If you can do this, you are learning the very important skill of managing your desires and how you spend your money and that will be a lesson that helps you your entire life. I guarantee it.

~ Brian


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