The next time you’re tempted to buy something, take a moment to ask yourself: “Do I need this, or do I just really want it?”
So, picture this: you’re strolling through the mall, and suddenly you spot a shiny new gadget that promises to make your life better. Your brain goes, “I need this!” But do you? Or is it just your inner gadget freak talking?
Needs are essential things that keep you alive and functioning. Like food, water, shelter, and, well, internet data.
Wants, on the other hand, are extras that make life enjoyable, like good headphones or the iPhone 15 Pro Max with several features that you probably would never use.
Because you love enjoyment (who doesn’t?) and are aspirational, your brain often tries to disguise your wants as needs.
So how do you differentiate between what you need and what you want?
1. Look in the mirror and ask yourself, “Can I live without this?”
The answer is usually yes. And if your answer is yes, then it’s probably a want. The latest phone will have a newer version in a year, and you also don’t need to think about impressing anybody any time. And no, there's no shame in wanting things; we all have guilty pleasures, but budgeting, planning and saving for them will help your finances.
2. Ask yourself if it aligns with your long-term or short-term goals.
If your 2024 goal is to save money for your master's degree abroad, buying a car if you work remotely is clearly not a good idea. You may also need to consider cooking, carpooling and cutting off multiple subscriptions. If what you’re considering buying or paying for doesn’t align with any of your goals, then it's likely just a fleeting desire. You can put it to the classic "sleep on it" test. If you wake up the next day still thinking about it, then maybe it's worth considering. If not, then it was probably just another shiny thing you don’t need.
3. Your wants are negotiable, while your needs are not.
Needs, such as food, water, shelter, and healthcare, are important to your existence. They ensure our survival and overall well-being. On the other hand, wants are the desires and preferences that enhance the quality of life but are not essential for survival. For example, the latest camera, fine dining, travel, and other forms of luxury. Understanding the difference between these two will help you make smart decisions about expending resources like time, money, and energy.
In the end, it’s all about balance. Although you need to meet your basic needs, indulging in your guilty pleasures can bring you joy. The trick is not to overdo it. So go ahead and treat yourself to that grilled fish, pizza, extra beer or that wig you saw online. Just remember to keep an eye on your budget and your sanity.