How can you\u00a0determine if it\u2019s something you need versus something you want?\r\n\r\nNeeds are expenses that are required and necessary such as shelter, food, and clothing. 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?\r\nHow to Choose Between Needs and Wants\r\nOur mind begins to blur the line between needs and wants. It\u2019s easy to choose between needing food to eat versus wanting the latest electronic gadget. It gets a bit more difficult when you\u2019re comparing the need for a car and a want for a luxury vehicle.\r\n\r\nThe major difference between needs and wants is simple.\r\n\r\n \tNeeds are things you have to have.\r\n \tWants are things you would like to have.\r\n\r\nKnowing the difference between needs and wants will help you prioritize purchases that make financial sense. If you\u2019re struggling financially or have other goals in mind, it may be good to meet the need and postpone the luxury want later.\r\nUnderstanding Your Money Mindset With Needs and Wants\r\nFor example, if you need a watch and your finances are in order, then buying a Movado instead of a Fossil may\u00a0be\u00a0okay.\r\n\r\nThe best rule of thumb is to make sure that your needs are covered and your preferences are only met if it\u2019s affordable. A budget is a useful tool to determine and prioritize your needs and plan the future purchase of\u00a0your wants.\u00a0If you\u2019ve budgeted for your preferred brands,\r\n\r\nA budget is a useful tool to determine and prioritize your needs and plan for your wants.\u00a0If you\u2019ve 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.\r\n\r\nIt\u2019s ok to buy things you want but make sure\u00a0you can afford it without placing your financial future at risk.\r\n3 Questions to Determine Needs vs. Wants\r\nHere are three questions that may be helpful in distinguishing between\u00a0needs and wants.\r\n\r\n \tAsk yourself, \u201cDo I need it?\u201d\r\n \tAsk yourself again, \u201cDo I need it now?\u201d\r\n \tThen ask yourself, \u201cWhat will happen if I don\u2019t have it?\u201d\r\n\r\nReplace \u201cit\u201d with the item you want\/need to purchase. By asking yourself these three questions, it will help you determine what\u2019s needed versus what\u2019s wanted. Simply asking the question, \u201ccan I afford it?\u201d may lead to purchasing regardless of the desire. The \u201ccan I afford it?\u201d question may tend to sway your mind to find ways to \u201cafford\u201d it regardless of your current financial situation. Keep the focus on your long-term financial well-being.