Needs Versus Wants In Budgeting

During Financial Literacy Month, conversations often focus on saving more, spending less, and managing money better. While those are important goals, they all rest on one foundational skill: understanding the difference between needs and wants.

A key step in budgeting is learning how to distinguish your needs from your wants. For those that are working on a debt pay-off plan, this is an essential step and includes a change in behavior patterns.

In order to make significant strides in frivolous spending, you have to decide if your spending money because you need to or if it is something that you just want.  My children and I had a conversation recently regarding our cable service. To them it was a necessity because they are accustomed to having it; however, when I pointed out the plethora of DVDs we have accumulated over the years and the ability to watch many of the same shows they watch via online services like Amazon Prime or Netflix the light bulb went off that it really was a service we could do without.

What Actually Counts as a Need

Needs are fairly easy to be identify. Our basic survival needs are food, water, shelter and clothing. As a parent, I classify reliable childcare as a need. Most parents will agree that without reliable childcare, we are unable to work or obtain work. There has even been attention in the news of late regarding women who had to make drastic choices when going on interviews because of their lack of childcare.

Further to childcare, help is available depending where you live. For example, some states in the US offer paid care programs so you can earn money while caring for your children if they have special needs, or even an elderly loved one. It is worth reaching out to local services such as Freedom Care (Missouri) to see if payment benefits are available to you and your family.

Why Wants Feel Like Needs Over Time

Wants are anything that goes beyond what is required for basic living and stability. The challenge is that wants rarely feel optional once they become routine.

We need water, but we may want a specific bottled brand.
We need food, but we may want takeout after a long day.
We need internet access, but we may want the fastest plan available.

Over time, convenience and comfort can blur the line. When something becomes part of our normal routine, it starts to feel essential, even when alternatives exist.

This does not make you irresponsible. It makes you human.

Rethinking Wants Without Guilt

The goal is not to eliminate every want. Life is meant to be enjoyed. The goal is to become intentional.

Many wants can be:

• Reduced
• Replaced with lower-cost options
• Enjoyed less frequently
• Planned for instead of impulsively purchased

When you are saving or paying down debt, small adjustments add up. Swapping one expense does not change everything, but consistent awareness does.  And if you’re not sure where to start, Primerica talks in depth about getting your finances in control, and could really help you differentiate the wants you allow yourself to have while still getting on top of debt.

A Gentle Reset for Your Budget

Take a look at one category of spending this week. Just one.

Ask yourself:

• Does this support my current financial goals?
• Is this a true need, or a want that could be adjusted?
• What would happen if I paused or reduced this for 30 days?

Awareness is the first win. Progress comes next.

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