Differentiating needs and wants – how and why?

By Maryam Iman binti Norhashimi

“It’s a matter of self-satisfaction” – A very short answer yet very popular from someone who buys things she doesn’t need but just want to see them being displayed on the shelves.

Last April was my very first time to shop online. I believe most of us are aware that the current COVID-19 pandemic is the reason why more people are forced to enjoy online shopping these days. What a great way to save our lives from going outside, and a prominent way to burn our bank account.

While shopping is what we do almost every single day, it is important to know a smart way of spending money according to our real needs and wants. If you have troubles planning your budget and have a tendency of become shopaholic, this feature might come in handy when purchasing worthless items the next time.

What are needs and wants?

Food and water to maintain health, clothes to wear and shelter for protection – these are the basic things that we need to survive. This definition is pretty much easy to digest for most people, but some others think differently. Now, here is where the wires crossed. Some people hold extreme conservation and reduce their expenditure to the bare minimum. They use their savings for their future kids, higher education and early retirement. A brilliant idea indeed!

Meanwhile, the wants expenses are the things that are undoubtedly not necessary for us to live a happy life. Most of the time, they are merely for self-satisfaction and to experience a more luxurious lifestyle: new clothing every occasion, eating outside instead of preparing meals at home, popcorns and entertainments on Friday night instead of checking out free books from the library, for instance.

Certainly, some would argue that the purchases worth the cost, in a way that they help boost their confidence and reduce stress. This might be true, as long as they shop within a balanced budget. The troubles come when we spend more on unnecessary items more than we can afford. In the end, it is back to how we choose to manage our money.

How to tell the difference between needs and wants?

The best way to figure out how to divide our expenses between needs and wants is by jotting everything down on paper. This is where the visualisation technique takes into account – see where our expenses flow clearly.

When categorising our priorities, take a pause, reflect and ask ourselves these questions: Do I really, truly, absolutely need this? Will I still be okay if I do not buy this?

The trick is that we have to answer honestly, and not to be swayed easily by our manipulative inside thoughts because what we think we need is sometimes not essentially needed.

Easy right?

If we still could not get closer to the truth, try this next step, ask yourself:

  1. What will happen if I bought the cheaper version of this instead?
  2. Is there anything else much more important than buying this?

This process might sound simple but it is an excellent way to brush up our habits in spending our money. After all, we do not want to walk on a financial tightrope, don’t we?

Differentiating between needs and wants

  1. It trains us to save more than spending.
  2. It reduces the possibility of us being in-debt in the future.
  3. It makes us learn to appreciate what we already have.
  4. We could plan our budget carefully to make our dreams a reality.***

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