Manicures. Gym memberships. Savage Fenty. New car. Jordans. Multiple Vacations. Professional hair stylist. Depending on who is viewing this list, one may classify these as wants, needs, or even a mix of the two. And that’s perfectly okay! We’re human and we all want things that bring enjoyment and satisfaction to our lives. However, understanding the difference between the two can be crucial in helping us build or maintain our financial health. 

So exactly what is the difference between a” want” and a “need”? DWM’s defines the difference below: 

• A “want is an item or experience that brings you a level of satisfaction that you feel you can’t live without…but you really can! (E.g. netflix, going to the bar, eating out)

• A “ need” is an item or experience that is essential to your day-to-day life. (E.g. food, water, car to get to work).

By simple definition, nobody’s want’s and needs are going to be the same because everyone has different values. If you were to take a couple minutes to write down your wants and needs, order them by importance, you might shock yourself by discovering what you really value. That “need”to have a monthly gym membership might be a want if it falls lower on spectrum of importance. 

But now that you know the difference, how does this help you? Although there are numerous benefits from separating “wants” from “needs”, one of the major ones is that it allows you to prioritize your spending. When you prioritize, you are able to get what you REALLY value without taking away from your other financial goals. After you pay yourself first and realize you only have a certain amount of funds left for wants/needs, you can do one of two things:

1. Reallocate or shift things around. You might notice that this month you can live without Item/Experience A and move it further down the list and get B instead.

2. Eliminate some wants and/or needs. If the priorities at the top can’t be moved because they really are that important, consider cutting down on your lower priorities in order to make room for higher ones.

Whether it’s getting your nails done, hair done, or going on those multiple trips, take a moment to reflect on where it falls on your list. If you practice prioritizing, you will soon discover you can continue getting your most valued wants and needs while still saving for the future. It might just take some adjusting or cutting down in other areas. As always, I want to hear from you! Is there a “want” you absolutely feel you can’t live without? How have you adjusted your budget over time to manage your needs and wants? 

Holding you accountable,

DWM