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):

Needs Wants
Food 2nd car insurance, gas, maintenance
Clothing Preschool tuition
House & utilities Cell phones?
Health insurance Any restaurants
1st car (insurance, gas, maintenance) Any hobby costs (gardening supplies, bike gear)
Cell phones? Toys
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:

  1. 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.
  2. 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?
  3. 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.”
  4. 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?

59 Responses to “Can You Tell the Difference Between Want vs. Need?”

  1. Kate says :

    Yes, yes, yes! I love you #3 point. It’s so important to challenge ourselves on our “needs” just so we can see where our actual needs are. I’ve had a lot of experiences lately where I got rid of stuff I always thought I needed (a lot of books, a certain kind of shoe, etc.) only to find out that not only did I not miss them, but I felt a lot better without them. Thanks for the post!

    • Kalie says :

      Yes, the point of challenging them isn’t necessarily to get rid of them all, but to see them in a new light. That can inform our decisions much better.

  2. Emily says :

    I’ve been thinking about this a lot lately! Thanks for sharing your thoughts. We had a rare and much-delayed shopping day this weekend where we picked up all the wants and needs that had been on our list for months. It wasn’t extravagant – lights for our bikes so we’d be safer, spices in bulk at the global foods market, a part we needed for a minor car repair, etc. It feels more frugal to not buy anything ever, but I think stewardship is about making those judgement calls that must happen everyday.

    • Kalie says :

      So true about the judgment calls we have to make about spending. Life costs money, that’s fine; we just want to be wise about those expenses.

  3. Holly says :

    Few of our bills are needs, either. Outside of our home payment, one car, food, utilities, etc., everything else we pay for is a want. I’m mostly fine with it because we have whittled down our spending tremendously. I’m okay with the wants we have now because they are very modest.

  4. Ms. Montana says :

    There is so much overlap in our culture. Like the idea that we need a cell phone. It might be convenient, but not needed. I lived quite well the first half of my life with out one.

    • Kalie says :

      Great example. Of course we aren’t going to try to live in the past, and it’s pretty hard to live as if you’re in a completely different culture. But we can gain some perspective from other times and places about what is truly needed.

  5. Tia says :

    Thanks so much for this post! I was recently considering wants versus needs in order to save more money in my budget. The easiest way to save more money is to take more wants out of your budget.

    • Kalie says :

      It’s the easiest way to save, up to a point. Then you hit the wall of what you’re unwilling to cut, but it’s great to know where that line is.

  6. Amanda says :

    Great, thought provoking post! The line between wants and needs is really muddied. I know we have many wants in our monthly expenses (cell phones come to mind). When we were still paying off debt and the kids were little, we made a plan on how we would get by financially if my husband were to lose his job. Our plan involved cutting most of the wants and really showed us how many expenses aren’t absolute necessities.

    • Kalie says :

      We have a “non-negotiable” or “emergency” spending plan in mind and pretty much know what we’d cut in the case of decreased income. It really is wise to have that plan in mind, as you did, especially if one spouse is staying home for a period of time.

  7. Tawcan says :

    Love this thought provoking post. Wants vs. needs is not always clear. The way I see it, if you can live without it for a month, it’s a need so you don’t it.

    • Kalie says :

      Hmm, I think that the one-month test is a good starting point, but might not catch certain annual or seasonal expenses. But overall, a great rule of thumb!

  8. Our Next Life says :

    Another powerful post! This is a really important question we should all be thinking about. I’d venture a guess that the majority of most people’s “needs” are wants, and we for sure fall into that too. If we realize how many wants we’re able to fulfill (including many in the “extreme frugality” camp), we’d all surely feel so much more gratitude!

    • Kalie says :

      We find a lot of power in contentment. It helps to recognize that what might be branded “frugal” in our society is still quite abundant.

  9. Amy says :

    It’s so true that such a seemingly simple concept as wants versus needs is actually fairly individual, cultural, and complicated. (Unless you’re simply talking about basic survival.)

  10. Josh says :

    Wants & needs can be a gray line of sorts. What I remember from Econ 101 were the phrases “subsititutes” and “Complements.”

    I normally view subsititutes as needs. I need to get across the country so I can either drive or fly.

    A complement is a want. I will fly across the country, so I want to fly 1st class instead of coach. Or paying the extra 50 cents to put a slice of cheese on my burger when I go to the restaurant.

    • Kalie says :

      My Econ. 101 prof had the weirdest way of saying “wants”–it sounded like “wonts.” I still think of that when the topic comes up. Sadly I don’t remember much else!

  11. The Green Swan says :

    I hear ya, there it’s a lot of grey area huh? I guess we first should define the life we want and then determine whether something is a need or want in order to live that lifestyle. Pretty tough in practice, no doubt. But life has to be worth living so might as well enjoy a few wants every now and then.

    • Kalie says :

      I absolutely agree that we should carefully select our wants based on our values, goals, etc., and embrace them. We enjoy many wants and appreciating them as such brings a lot of joy.

  12. Mustard Seed Money says :

    I feel like everytime I go on vacation I am offered a new perspective. While I almost always enjoy the vacation that we go on. I always come back so thankful for the home that I have and being able to unplug from the daily grind.

    While on vacation I am able to give up internet and tv I always seem to gradually work it back into my daily routine at home.

    I need to just cancel tv and be done with it.

    • Kalie says :

      We also return from vacations with an appreciation for all the conveniences and comforts of home.

      There are some good ways to enjoy the occasional show without having to pay for cable, as I’m sure you know. Laptop streaming with HDMI cable ($5, ebay) to connect to the TV is the cheapest. And that little bit of hassle might help us watch less TV 🙂

  13. DC YAM says :

    I remember hearing a quote that I think was by Seth Godin (but not 100% sure), where he said “people don’t by what they need anymore – they buy what they want.” A majority of people are above and beyond simply “getting by” and even those who don’t have much money still find space in their budget for TVs and other “wants.” I’d say I spend most of my money on wants as well.

  14. Harmony says :

    The issue of wants versus needs (like many others) can’t really be reduced to black and white, it’s much more of a continuum.

    I think that #2 is a big factor in figuring out whether something is a want or a need. Why do you think you need something? Is it just because everyone else has one or advertisements tell you it’s necessary? Or, does the purchase of something serve a purpose in your life?

    Of course, perspective is always important too. You don’t need to look far to dispel feelings of being deprived by a frugal lifestyle.

  15. Fruclassity (Ruth) says :

    I was thinking I had a pretty good handle on the whole “wants vs. needs” thing – but now it’s all out the window! You’re right of course. We actually have very few needs if “needs” refers to survival. A little imposed “deprivation” is a good thing. It makes the deepest desires of our hearts surface and obliterates the fluff that we don’t miss at all. I guess when I think of needs, I’m thinking of those things that genuinely contribute to abundant living.

    • Kalie says :

      We can certainly define needs in different ways, and for our budgeting purposes we are a bit more generous than what I’ve laid out here. But viewing those as wants certainly helps us feel content.

  16. Hannah says :

    Fascinating that your econ professors discussed wants and needs. I thought that was entirely a personal finance concept. There is elastic and inelastic demand (with inelastic long run demand being a “need”).

    It’s always been helpful for me to recognize that we can cut back in almost every single category of our budget and still survive. The only exception is taxes and other obligations that we can’t circumvent.

  17. Laurie Frugal Farmer says :

    Absolutely love this, Kalie. I always think I know the difference between needs and wants until I start reading up on The Great Depression. Then it becomes clear very quickly that I don’t have a clue. 🙂

    • Kalie says :

      Reading up on the Great Depression sounds like a good exercise for re-gaining perspective, Laurie. It’s amazing what humans are capable of surviving on. At least, amazing to our modern sensibilities.

  18. Laying Down the Law Debt says :

    This is really hard to do on a per-item basis! But I think the “perspective” and “critical” parts are the most important. Question everything! Be a rebel! We’re still working on it ourselves, and it’s hard not to relax and say “I deserve [a thing] because I’ve worked so hard for it” but it’ll be worth it in the end.

    • Kalie says :

      I agree, the point is not to over-analyze each item, but to have that view of questioning your assumptions while being grateful. I certainly also believe there is room for relaxation and rewards, however that fits into your bigger goals.

  19. Uffe says :

    Hey !

    If you want to make this easy for yourselves, generalise the thing you intend to use. Example; Want: platter of burgers; Need: food; Want: Fancy car™; Need: transportation. Most of our needs are not needs but cultural wants. This can be difficult to overcome.

    Every £$€¥ not needed should go to building wealth and securing your long-term goals. Poor people however may ha a different mindset, as they might not see a way out of poverty and therefore does not save.

    • Kalie says :

      I know what you mean about the poverty cycle being hard to break out of because it feels impossible.

      I can’t say we would ever cut all wants, but we do try to minimize some of the costs that others accept without question. We wouldn’t want to be come miserly or stingy 🙂

  20. Crystal says :

    Finances are so closely tied to our emotions that I think it is vital that we distinguish between our needs and our wants! It can be so hard though, especially daunting tasks like going to the grocery store, making it to the checkout lane when you finally realize, “wait…I don’t necessarily need all this stuf!” I try my best to implement your second point, Get Critical. Every purchase is questioned and keeps me in check. And sometimes I’m that horrible person that leaves stuff with the checkout guy/gal because I decided I don’t really need that purchase!

    • Kalie says :

      I agree that our emotions complicate our spending choices, which is why trying to think through purchases critically is a good counter-balance. I’m sure we’ve all made that last-minute choice not to purchase something we don’t really need.

  21. Rajkumar says :

    Very nice article, I really loved it. The difference between need and want is. Humans tendency to crave for more wants rather than needs. I read somewhere

    “Earth has enough resources to fulfill your needs but not wants”
    Humans are really greedy now a days and destroying Mother Nature for the sake of temporary comforts and luxuries. We should learn to lead our life as simple as we can. That is the only way one can live his life to fullest.

    Keep producing more articles like this.

    Have a good day!

  22. Piggybanknomics says :

    Great post. If more people were able to figure out there true needs, there would be less of a debt crisis on hand. However, I believe that a thing can continually cross back and forth from the “needs” to “wants” back to “needs” etc. Clothes wear out/outgrown and need to be replaced. High speed internet may be a need to produce income (ahm, blogging). A gym membership may be seen as a :”want” but the implications of a membership could be a “need.” It is truly hard to figure out needs vs wants, and then to what extent.

  23. Ten Factorial Rocks says :

    Good post. Understanding this difference is key to happiness in life. What is frugal to one is not to another also because of the difference in perception between need and want. I cover this in 2 articles taking the extreme cases of a top tier %er and a poor maid in Asia. Both cases that I know personally offer lessons on wants vs needs.

    • Kalie says :

      There are definitely cultural and individual variables to the want vs. need question. Realizing this can help us challenge our definition, but also understand where it comes from.

  24. TJ says :

    Glad to see the wider distribution on this! It’s very easy to get trapped thinking our wants are in fact needs.

    The older I get, the more I realize I truly do need less stuff (and experiences?) to feel fulfilled.. It’s almost counter-intuitive because most people tend to go in the exact opposite direction of always “needing” more as life goes on.

    I appreciate the food for thought.

  25. Steven Goodwin says :

    Wow, amazing eye opener! I never thought about needs and wants this way. Thanks. It is true that we are truly blessed here in USA and yet you wouldn’t think it when you turned on the tv or went places as entitlement, greed, and envy is running rampant around here!

    • Kalie says :

      Yes, I think that greed and entitlement rubs off on us more than we may like to admit. Gratitude is a great antidote for that!

  26. Sikasem says :

    It’s like we’ve embraced a lot of things that used to be considered as ‘wants’ as ‘needs’. I’m not surprised that distinguishing between them has been difficult these days.

    • Piggybanknomics says :

      I agree. 15 years ago having the Internet and having a cell were considered “wants” but society has evolved in a way that both are not only seen as needs, but usually they go hand in hand (ex smart phones)

    • Kalie says :

      The definition of needs certainly changes across time and culture; even if something isn’t needed for basic survival, it may be pretty much required for normal functioning in society.

    • Kalie says :

      Yes, I agree that former “wants” and now considered “needs.” That’s okay, as long as we keep it all in perspective.

  27. Kurt says :

    Need is when I buy something. Want is when my spouse buys something–but always at a bargain price! 🙂

  28. Heidi says :

    I linked here from lifehacker and I was super skeptical of this post. I decided to critically look through my budget and add up all of my wants, as if to disprove the post. I was humbled. About a sixth of our income is spent on wants, so much more than I had presumed for our “very tight budget”. While it is hard to cut out the weddings, the visits to family, gifts for others, and things that tie us to our community, it does make me feel better to see these things as a choice.

    • Kalie says :

      Thanks for sharing your skepticism as well as what you learned. I could see myself having the same response! I am working on a post about the “myself vs. others” portion of my definition, and a lot of those expenses you listed could fall under the “others” portion. I agree, though, that seeing it as a choice to prioritize family, friends, and giving is liberating.

  29. Frugal Millennial says :

    This is so important. Our culture does a great job of convincing us that wants are actually needs. I used to have an old, enormous TV that wasn’t a flat-screen and I got upset when my hubby bought an expensive flat screen TV. My mom told me that I was being unreasonable and that the reality was that we NEEDED a new TV. When I told her that no one NEEDS a TV, she looked at me like that was the craziest thing she’d ever heard. A billion people in the world live in extreme poverty, but we NEED a new TV? Our priorities in the U.S. are definitely a little crazy, and it’s important to have some perspective. We may not feel wealthy compared to those around us, but we are very fortunate simply to have our basic needs for food/water/etc fulfilled.

    • Kalie says :

      That’s a great perspective, Jen. I agree that U.S. priorities are off and that makes it very difficult to navigate wants vs. needs. There is a cultural component to it, and trying to live by another country or culture’s standards could be very hard or awkward here, but it certainly can inform our spending choices in many areas.

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