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.

    Copyright (c) 2004, by Jeffrey Strain

    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 -- a website dedicated to saving you money. [email protected]

    In The News:

    4 steps for building generational wealth  White Mountain Independent
    Myths About Wealth Creation  Times of India
    News News: Hispanic homeownership rates improving  Mortgage Professional America
    How to maximise your pandemic pocket change  The Australian Financial Review
    Creating Wealth While Black  Jackson Free Press
    Multi-Unit Franchises: Path to Wealth  Small Business Trends
    A sordid tale of housing and systemic racism  Bucks County Courier Times

  • Residual Income - 3 Ideas for Long Term Profits

    A residual income is one that comes in no matter... Read More

    5 Simple Steps for Serious Saving and Financial Growth

    1) Pay off your loan, credit and store card debt... Read More

    How to Save Money and Take the Vacation You Always Wanted

    Many people don't realize how much money they spend on... Read More

    Generate Savings with Smart Use of Electricity!

    No matter what income level you are currently at, generating... Read More

    Get Rich Doing What Others Dont

    "The quickest way to wealthThat I've found to be true;Is... Read More

    Personal Finance Rules to Building Wealth

    Key 1 Pay your self firstkey 2 Saving is not... Read More

    Living Trusts: Do They Protect Your Assets From Creditors?

    A surprising number of readers want to know "Can a... Read More

    Wealth Building Tips: Manage Your Money

    As someone who loves to shop, enjoys holidays and owns... Read More

    Increase Your Business with a New Old Method: Vaastu Shastra

    Whether an established conglomerate or a fledgling company, a business... Read More

    Virtual Millionaire Strategy Exposed

    Let's begin this lesson with a definition of the term... Read More

    Wealth Management, Wealth Protection, and Tax Planning

    U.S. Supreme Justice Louis D. Brandeis"I live in Alexandria Virginia.... Read More

    A New Paradigm Shift In Earthly Wealth

    Hello,If you dont understand this yet, or have not heard... Read More

    Turbocharged Financial Planning

    Financial planning is an ongoing process individuals and businesses should... Read More

    Four Pillars of Creating Wealth

    Some people in this world are thinking that their poor... Read More

    My Entrepreneurial Fire-I Grabbed My First Million Before I Got Too Old

    My First Million took me exactly 27 months to achieve.... Read More

    Saving Money By Spending Wisely

    Why is it that the older and richer people become,... Read More

    A College Degree or an MBA is NOT NEEDED to be Financially Free

    Look at Forbes' top 10 United States wealthiest people. Notice... Read More

    Does Money Grow On Trees?

    "Money Doesn't Grow On Trees."Some of us even believe it.... Read More

    How To Be the Ultimate American Consumer

    Feel like a lemming lately? Ready to follow the crowd... Read More

    Starting With Smaller Goals First And Work Your Way Up Until You Achieve Financial Freedom

    While you need to have a lot of positive-thought and... Read More

    Retirement Planning the Offshore Way

    Retirement Planning the Offshore Way Why do so many of... Read More

    You Deserve To Retire Early

    The fact is that most people continue to work for... Read More

    Jobless? You Stand To Be Rich!

    This is a true story about a homeless man from... Read More

    Finding Financial Freedom

    Do you ever get this in your email box: Find... Read More

    The Wealth Connection ? 2 Steps to Brighten Your Golden Years

    Estimated Reading Time: 4 minutes -- Envision your life 10... Read More