Can You Tell the Difference Between Want vs. Need?
What is the purpose of money? Nothing will clarify your budget, streamline your spending, or motivate your savings more than your answer to that question. I believe the purpose of money is to provide for needs and wants, for myself and others, now and in the future. Today, let’s break down that first part—providing for wants and needs.
Which brings me to a confession. I may be a personal finance blogger, but I can’t tell the difference between wants and needs. It’s Economics 101, yet I fail miserably. I suspect I’m not alone.
Financial advice assumes we’re all able to distinguish between the two. Yet if we actually could, we’d need a lot less financial advice. Of course we all know that food, shelter, and clothing are necessary. We could reasonably add health insurance to the list since it’s required by law. After that things get a bit fuzzy.
For example, are our two vehicles wants or needs? Neil’s work is 11 miles away—bikeable in theory, but it doesn’t work out in reality. Our second car is not necessary since I don’t drive to work, but considering our suburb, climate, and family size we would be quite limited without it.
We’re completely settled on having two cars. Point is—it’s pretty hard to distinguish between wants and needs in a culture where the standard of living is really quite high, life isn’t simple, and we are constantly bombarded with suggestions that we “need” a lot of things to lead a normal life. Like in these ads we made fun of.
According to these definitions, we spend most of our money on wants instead of needs (recent expenses included):
|Food||2nd car insurance, gas, maintenance|
|House & utilities||Cell phones?|
|Health insurance||Any restaurants|
|1st car (insurance, gas, maintenance)||Any hobby costs (gardening supplies, bike gear)|
|Home goods (guest room sheets, curtains)|
|Ministry expenses (retreats, babysitters, hosting)|
|Dates and family outings|
How could I possibly say I’m living simply when I spend most of my money on wants?
You could argue that some of the wants are needs. Maybe I needed spare sheets for the guest room. Who knows?
And then how do you draw the line within categories of “need”? For example, we buy ice cream to have at home. We don’t need to eat ice cream, ever. So food is a need, but ice cream is not. Since we don’t eat at a subsistence level, some of our grocery spending should fall under “want,” not “need.”
Do we need the Internet? Essentially, yes. But in terms of actual survival, of course not. Do we need hobbies? Technically no, but life would be rather sad without them.
Under my definition of money’s purposes, wants are absolutely allowed. So the point here isn’t to seek and destroy the wants, and live in caves. Or to feel guilty if we live in homes instead of caves. Challenging our very conception of “need” can do a world of good, though. Here’s how:
- Get perspective. We are so rich. So blessed. Most of us are reading blog posts on our personal computers with high-speed internet in warm, dry buildings with full bellies. Having our needs met is hardly a question on our radar, and that’s something to be sooo thankful for. Keep gratitude on your radar instead. Any notion of extreme frugality flies out the window when we look at the world around us where half the population lives on $2 a day.
- Get critical. Cultural norms and masterful marketing convince us that we need more everything! Better everything! Newer everything! I am in no way immune. Here’s a silly but real example. Do I need to own a clutch purse and nude heels in order to attend weddings? Or is it fine to feign fashion cluelessness and show up with flip flops and a cross-body purse, as I did this summer?
- Get creative. People don’t challenge anything in the budget that’s deemed a need. But if you can bring that global perspective to bear, you’ll start to squint out your blind spots. For us it was pricey date nights, outings with friends, and travel. We didn’t give up these areas entirely—they’re too closely related to our values. We did find creative ways to cut back when we peeled away their privileged status as “needs.”
- Get generous. Others are in real need. Acknowledging our decadent, want-filled lifestyle isn’t meant to make us feel guilty. Instead, it makes us feel wealthy and ready to share. Getting perspective on our relative affluence prompts us to inflate someone else’s lifestyle instead of our own.
I questioned my definition of “need” and found it wanting. I still can’t tell the difference, but it sure seems luxurious to classify more things as wants than needs. And I feel the need to help those without such luxury more than ever.
Do you hard time distinguishing between wants and needs? What’s a “need” that you’ve challenged?