The Difference Between Needs And Wants, And How It Can Help You Save Money

The Difference Between Needs And Wants, And How It Can Help You Save Money

We live in a society dominated by media, glamorous magazines, and with a constant hunger for consumption. Our desire to continuously keep up with the Joneses makes us spend money on items that we desire, but don’t actually need.

But what is the true difference between a ‘need’ and a ‘want’? When do we truly need things, and when do we simply have a desire to possess something, which makes us feel good? And how strong should we give in to our desires?

If we look at our pure survival instincts, we actually know much, much less than we think: some food and water to keep alive, one or two outfits to dress up, a one-room condo to shelter, and perhaps a public transportation ticket to get around. Naturally, although such a lifestyle could save you a lot of money, it would hardly contribute to one’s quality of life.

The hard thing is to actually distinguish between something we desire and something we truly need in order to lead a fulfilling life. A dress, as an example, might be something you need, if you do not possess a similar item and if the purchase of the item would increase the quality of your life in one way or the other (for example when you need it for a special occasion).

However, many people let themselves be blinded by the feeling of purchasing something or feeling good about something newly purchased. Someone might buy a dress, although they already possess great, high-quality, and similar dresses.

Another example is men’s most important status symbol: the car. Although many men see a car as a simple means to get from A to B and are not prepared to spend a lot on their car, for other men it is an extension of their ego, and a chance to keep up with their friends, relatives, and co-workers. The result is often the purchase of items they don’t truly need, but which they desire to possess because others possess them.

If you have the desire to live more frugally, it is important to distinguish between things you need, as they enhance the quality of your life and things you merely desire, and which make you feel good for a short period of time. You can make that difference by asking yourself two important questions before purchasing an item:

  • Am I sure, that I have no similar item already in my possession, which is functional? If I do have this item already, is it necessary for me to have more of the same item for my daily life (think about someone who has to go to work in a suit every day, such a person will probably need more than one suit)?
  • Am I certain, that there is no other item, available at a lower price, which offers the same functionality?

If one of both questions is answered with ‘no’, chances are you might want to reconsider to make the purchase. This goes a long way and covers many items. Think about convenience products, such as a quick coffee at Starbucks while rushing to work. You might save more money when preparing a coffee at home, or having one when arriving at work. Or how about the newspaper? There are many apps or websites offering free of charge news services.

Identifying your needs and wants can save you a lot of money, and potentially keep you out of debt. In fact, if you realize that the sole purpose of commercials and advertisements is to make consumers spend more money, it might be easier to resist the urge.

Have you ever had the urge to spend your money out of a strong desire? Did you ever resist the urge? Or, how do you differentiate between needs and wants? Express your thoughts in the comments below.

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