How to Differentiate Needs and Wants for Financial Management

[Suba]

The most basic financial management starts with knowing what is a need and what is a want. This classification or grouping between needs and wants will of course depend on each person. In addition to basic needs, many people also classify some secondary needs into primary needs such as smartphones, transportation or vehicles and entertainment, as well as tertiary needs such as luxury goods, etc. So needs are daily necessities that must be met, are permanent, pose a risk to a person's survival, while wants are only for a person's self-satisfaction and do not have to be fulfilled, do not have a negative impact on a person's life.

Here is one way that I know to distinguish wants from needs, namely by creating a priority scale of spending for all needs and of course must be adjusted to income. Please add information on other methods.

 

[Trush Jodie]

Needs are those things that you absolutely can't do without. Wants are those things that you can overlook for the mean time.

 

[Springtime]

Needs are the basic necessities you must have to survive. For wants, they are something you would like to have but not mandatory.

 

[Min George]

Anything that if it is not available, you won't survive is a need. What you need to feel good is wants.

 

[Augusta]

Needs have immediate consequences if they're not paid for like food, shelter, clothing, healthcare, insurance etc Wants, on the other hand, are everything else that we lived with without buying

 

[Nomad]

Needs means essential, wants means wishes and luxuries. You cannot live without needs and you are perfectly fine without wants.

 

[Fire&Rain]

Another method that can help distinguish needs from wants is called the 24-hour rule. Basically, you wait 24 hours before buying anything that's not a true necessity. This helps curb impulse buying and gives you time to think about whether the purchase is really something you need, or just something you want. I appreciate this method so much.

 

[Augusta]

Our Needs impact well-being in the long term. these are Food, water, shelter, clothing, healthcare, education. etc