An important distinction to understand is that needs and wants aren’t the same. As you read that sentence, you’re probably saying to yourself…everyone knows that, right!? And while you might know this intellectually, there is a good chance that you’re not being completely honest with yourself regarding the things that you buy, because you have a tendency to justify in your mind the things you want as something you need.
The lines can be a little blurry in the area of needs vs. wants when it comes to your spending habits. That’s why it’s so important to get clear and spend some time to seriously consider taking a look at your current lifestyle and what your true needs are in contrast to those things which are convenient wants. Not to say that you shouldn’t spend money on conveniences, but until you get a hold of your finances, some conveniences may need to be temporarily put on the back burner.
“Focus not on what you earn, focus on how you spend what you earn.”
― Stephen Magnus
Taking this step by being honest with yourself and drawing a clear line will go a long way in saving you money and allowing you to spend less than you earn. Because not all needs and wants are completely black and white for everybody, it’s a process that has to be done by you, for you. Something that can be a want for one person can be a need for another and vice versa. So, there’s no blanket list that covers needs and wants equally for everyone.
As a very simplified example, if you earn your living using a computer, then a computer is a requirement for you (a need), but if you only use a computer to play the most recent on-line games for entertainment purposes, then it’s not. Some of the choices will be difficult, but making sacrifices now will pay great dividends for your financial future.
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