Needs Versus Wants

If you are ever going to get ahead financially, you must know the difference between needs and wants. There is nothing wrong with wanting a brand new car, but you must realize that it is a want and not a need. You can get a perfectly fine car that is a few years old and save thousands of dollars. No matter how much money a person has, decisions must be made based on needs versus wants.

The most basic needs are food, shelter, and water. It is possible to survive with just these most basic needs being met, but it is not practical. We need a way to get to work, but this could be taking the bus. We need some pleasure in our lives, but we do not need to own hundreds of DVDs or need to go to the movies every weekend.

The trick is to base your spending on your income, and not on what you feel you deserve. It is easy to reward yourself with expensive items that you tell yourself that you deserve. I work hard. I deserve a $200 jacket. I believe that a better way to reward yourself is: I work hard, I deserve to be able to retire before the age of 80.

So a primary question to ask before purchasing an item is whether it is a need or a want. Several other questions will aid you in deciding whether or not to buy. You should ask yourself if you already own a similar item and where exactly you will store the item in your home. And if you still end up buying what you know you shouldn't, you probably just need to stay away from the mall.