The difference between a want and a need can be a subtle one, but it’s an important distinction to understand when it comes to spending money. A need is something that is essential for survival or well-being, such as food, shelter, and clothing. A want, on the other hand, is something that is desired but not necessarily required.
This means that the new car you have been looking at might not be what you actually need…Would you rather pay the $500 car payment a month? Or would you rather settle for something used and less expensive at $200ish? You could save $300 that can be used to invest or start that business you’ve been thinking about. You could even go for no payment at all and keep your old car longer, imagine freeing up $500 a month!
It’s easy to get caught up in the idea that we need to have the latest gadgets or the newest fashion trends, but it’s important to remember that these things are wants, not needs. When we focus on meeting our basic needs first and then saving or investing the extra money, we can build a strong foundation for our financial future.
One way to determine if something is a want or a need is to ask yourself if you can live without it. If the answer is yes, then it’s probably a want. It’s also helpful to consider whether the item is a one-time purchase or if it’s something that will continue to cost money in the long term. For example, a new car may be a want that will require ongoing expenses for insurance, maintenance, and fuel.
Understanding the difference between a want and a need can help us make smarter financial decisions and avoid overspending. By prioritizing our needs and saving or investing the money we have left over, we can work towards our financial goals and build a better future for ourselves.
So before you go out and make a big purchase just ask yourself the question, you wont regret it…