What are the differences between needs and wants?

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How can you determine if it’s something you need versus something you want?Needs are expenses that are required and necessary such as shelter, food and health. A car may also be a need for work purposes however be mindful between necessity and luxury. You may need a car to get to work but want a more expensive SUV. Is the more expensive option necessary to accomplish the actual goal of transportation?

3 Questions to Determine Needs vs. Wants

Here are three questions that may be helpful in distinguishing between needs and wants.

  1. Ask yourself, “Do I need it?”
  2. Ask yourself again, “Do I need it now?”
  3. Then ask yourself, “What will happen if I don’t have it?”

Replace “it” with the item you want/need to purchase.By asking yourself these three questions, it will help you determine what’s needed versus what’s wanted.Simply asking the question, “can I afford it?” may lead to purchasing regardless of desire. The “can I afford it?” question may tend to sway your mind to find ways to “afford” it regardless of your current financial situation. Keep focus on your long-term financial wellbeing.

Asked in Elizabeth, NJ on February 11th, 2015 in Budgets.
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A few years ago, a friend stated that he needed an SUV to take his boat from his driveway to the marina. He waited until his older car was on its last leg. He even took his time to research the best SUV within his budget. At the dealership, the car salesman convinced him to test drive a Lincoln Navigator. He knew he needed an SUV but began wanting the more expensive Navigator.

Then, something happened, he began saying he needed a Navigator.

Our mind begins to blur the line between needs and wants. It’s easy to choose between needing food to eat versus wanting the latest electronic gadget. It gets a bit more difficult when you’re comparing need for a car and want for a luxury one.

Which would you choose?

The major difference between needs and wants is simple. Needs are things you have to have. Wants are things you would like to have.

Knowing the difference between needs and wants will help you prioritize purchases that make financial sense. If you’re struggling financially or have other goals in mind, it may be good to meet the need and postpone the luxury want later.

However, if you need a watch and your finances are in order, then buying a Movado instead of a Fossil can be okay.

Basically, the best rule of thumb is to make sure that your needs are covered and your preferences are only met if it’s affordable. A budget is a useful tool to determine and prioritize your needs and plan the purchase for your wants.

If you’ve budgeted for your preferred brands, then by all means go for it. If you are still working on reducing debt or saving money, find the fiscally responsible alternatives to the things you need and hold off on the wants.

I remember wanting an iPad when they first came out. I would sit around coffee houses watching people scrolling through their tablets. I convinced myself how easier my life would be if I had an iPad. I trained my mind to think I needed an iPad although my life had been fine without one for years. Being me, I decided to hold off on purchasing the item and instead began saving for it.  

I bought the iPad and hardly used it. A few months later, I sold the iPad on Craigslist taking a $100 lost.

It’s ok to buy things you want but make sure…dare I say it again…you’ve budgeted for it.

Jason Vitug Phroogie Answered on November 8, 2014.
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Here’s a simple answer:

  • Wants are things you can live without like luxury cars and expensive clothing.
  • Needs are things you can NOT live without like food and water.
Mark Ross Canaoay Newbie Answered on December 3, 2014.
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There are some great answers here. Needs are necessary for you to survive and be a functioning, productive member of society. Unless you live in a nudist colony, you need clothes. You do NOT designer clothes from Gucci or Hollister.

However, that doesn’t necessarily mean that you should buy cheap junk. Buying substandard products can cost you more in the long run, as I explain here. Get things that are well-made and durable, but don’t overspend on something just because it looks nice or has a prestigious name attached.

Froogal Stoodent Newbie Answered on January 25, 2015.
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