The Difference Between Wants & Needs > NetSparsh - Viral Content you Love & Share

Home
>
Wealth Building
>
The Difference Between Wants & Needs

The Difference Between Wants & Needs

So you want to become wealthy? While there is no single road to getting there, it's a sure bet that one principle is in place for those who keep their wealth over a lifetime. Live beneath your means. Spend less than you make. Don't spend more than you can afford. It doesn't come any simpler than this. If you want to create wealth, you have to learn to do this. It doesn't matter if you make $10,000 a year or $1 million, if you don't learn how to master the step of spending less than you earn, you'll never create lasting wealth.

While the concept is simple, chances are you are not following it. In all likelihood, you are living paycheck to paycheck, treading water. No matter how hard you try, you never seem to get ahead. Even when the raises come, the money still disappears just as fast. If this sounds like your situation, you probably have not mastered the difference between needs and wants.

First, it's important to realize that wants and needs are not the same. When you read that sentence, you probably said to yourself, "Of course, everyone knows that." Again, while everyone may know this intellectually, it is a good bet that you aren't completely honest with yourself when it comes to the things you purchase.

How many times have you heard (or for that matter said yourself) "I absolutely need (fill in the blank)" when in reality the meaning was "I really want (fill in the blank)?" I can't live without those shoes...I will die if I can't have that ring...I simply have to have that car...the list can go on and on. Please don't get me wrong. These are phrases that we all use. That is why it's important to step back and remember that wants and needs are not the same.

It's important at this point to make clear that taking the time to critically look at your current lifestyle and what are the true needs versus those things that are convenient wants will go a long way in saving you money and enabling you to spend less than you make. Let's take an example of your TV. Is your TV a need or a want? Although I can hear the arguments already rationalizing why a TV is a necessary part of your life, the truth is that it is more than likely a want. In most cases, it is probably an affordable want (The exception may be if you decided you had to have that 50 inch state of the art plasma television with the price tag of a small car). The question is whether the digital cable TV, 6 premium channels, satellite dish, the on demand movies, the DVD player with movie selection, etc are all also affordable wants?

Here is a list. Take a few moments to jot down what is a need and what is a want.

shoes

designer suit

water

large apartment

bed

ice-cream

lottery tickets

car

entertainment center

club membership

lunch

concert tickets

trip to Hawaii

medicine

necklace

computer

daily espresso

cellular phone

golf clubs

furnishings

Unfortunately, the answers to these questions are not completely black and white. What may be a want for one person may be a necessity for another person. For example, let's take a look at a computer. If you make your livelihood on the computer, then a computer is a necessity for you. If you only use a computer to play the latest online games, then it isn't. Knowing this, we can still make some pretty good guesses as to what are wants and what are needs from the above list for most people. Shoes (and clothing in general), water, bed, car, lunch, medicine and furnishings are good bets to be needs. Now that doesn't mean that the latest model, 4 wheel drive sport utility vehicle with all the extras counts as a need for most people, but basic transportation to make a living does.

A large apartment, computer and cellular phone may or may not qualify as a need depending on your particular circumstances while a designer suit, ice-cream, lottery tickets, entertainment center, club membership, concert tickets, trip to Hawaii, necklace, daily espresso and golf clubs all probably fall into the want section.

If you can take the time to start being honest with yourself, you will find that a lot of the things which you assumed were an absolute necessity until now are in reality nothing more than wants. Once you distinguish between the two and look at these issues objectively, you have placed yourself in the position to live within your means by simply asking yourself whether or not an item or service you are about to purchase is a need or merely a want.

This article may be freely distributed so long as the copyright, author's information and an active link (where possible) are included.

A complimentary copy of any newsletter or a link to the site where the article is posted would be greatly appreciated.

About The Author

Jeffrey Strain has published hundreds of money saving articles and the creator of the Daily Money Saving Challenge Program. He is the co-owner of http://www.savingadvice.com -- a website dedicated to saving you money. [email protected]

In The News:

2 Stocks to Help You Build Retirement Wealth The Motley Fool

Entrepreneur Brian Ward Shares the Psychology Behind Wealth Creation LatestLY

Here's how Black Americans can begin building wealth right now CNBC

It isn't too late for millennials to build wealth. What to do if you're starting now CNBC

Cryptocurrencies can be a tool for building personal wealth long-term CNBC

Vauld raises $25 million to build crypto wealth globally Mint

Locus commits to long-term employee wealth creation by assigning USD 4 million for its ESOP buyback ANI News

5 Common Mistakes to Avoid When Building Wealth SWAAY

Leaders working to bring wealth-building business, industry to Norman Norman Transcript

How to Overcome the Top 3 Obstacles Standing in the Way of Your Wealth Goals EIN News

These 6 psychological biases may be holding you back from building wealth CNBC