How to distinguish “Wants” from “Needs”
So let’s go back to the image of you in your favorite store as you contemplate your purchase. The first step is to distinguish if the purchase you’re considering is a “need” or a “want.”
A “need” is an expense that is essential for you to live.
Here are some examples of “needs”:- Food
- Housing (rent or mortgage payments)
- Basic clothing
- Transportation (car costs, gas, subway or bus fare to get to work, etc.)
- Utilities (gas, water, electric)
- Insurance
Helpful hint: If you don’t have a budget yet, you should start one today – for tips, check out this resource here.
On the flip side, a “want” is a non-essential purchase that is justifiable only after your “needs” are met.
Here are some examples of “wants”:- Vacations
- Entertainment
- Designer clothing
- Gym memberships
- Coffeehouse drinks
- Eating out too often
Here at United, our dream for you is that the next time you’re in your favorite store, your inner voice can graduate from: “I’m going to buy this now!” to: “I’m happy that I’ve budgeted for all my “needs” this month and have allocated those funds appropriately. I have budgeted for this beautiful “want” item in front of me, and I have the cash in my wallet to pay for it. Forget what the others say, I love budgeting!”
Or, you know, something like that.
We don’t expect you to nerd out over budgeting the way we do, but we do know you’ll love the results, which means you’ll eventually fall in love with the process of budgeting too.
Get Started With Budgeting
While it might be difficult at first to take control of your spending, like any muscle, the more you practice the stronger you will become. Budgeting, and the mental mindset around budgeting, are tools that will truly make the difference in your financial success. If you take the steps today to develop the discipline to budget every dollar and clearly understand your wants vs. needs, you will reap the financial rewards in the years to come!