Often, people’s financial problems are largely because they don’t understand the difference between want and need. A need is something that is necessary to keep you alive, and a want is something that makes your life more comfortable. Here are a few tips for saving money on three of the most common things that we need, and how to avoid spending unnecessary money based on what we want.
Your most basic need is shelter—someplace to live that is safe and protects you from the elements. Most people justify their want for a big house, which usually comes with a big mortgage payment, by calling it a need for shelter. The best way to differentiate the need for shelter from the want for a big house is to imagine if your income was 50 percent less than what it is now. Would you be able to pay your rent or mortgage payment with less income? If the answer is no, consider looking for safe, family-friendly neighborhoods or apartment communities that are more reasonably priced.
Food and water are necessary to stay alive. However, we decide what we eat based on what we want. Eating out every day or at expensive restaurants can be costly; it gives you the nourishment you need, but it isn’t the most affordable way of getting that important energy.
Save money by cooking your meals and taking your lunch to work. This will help you minimize fast-food or restaurant visits. Using coupons at large supermarket chains are also a great way to save money on groceries.
Having clothes to wear is a need. However, buying brand-name or excessive amounts of clothes are wants, and costly ones. Even in a situation where you are required to wear business attire every day, there are ways to save money on clothes.
You can save money by buying the items you need at higher-end thrift stores. You may be surprised at the great bargains on brand-name items you can find at thrift stores. Also, consider “going shopping” in your best friend’s closet. Get gently- or never-worn clothes from close family members and friends, especially when they do their spring cleaning or when they clean out their closets before they give them away to someone else.
Do you need a cell phone? Most people believe that they do need a cell phone for emergencies, but they use their cell phone for more than just emergencies. The need to have a phone in case of emergencies is often used to justify the purchase of an expensive smartphone and cell phone plans based on what we want. Save money with your cell phone usage by changing your cell phone plan from an expensive contract plan to a less expensive month-to-month or prepaid cell phone service. Also, use free Wi-Fi in public locations or at your home instead of paying a lot for a data plan to surf the Internet or use apps on your smartphone.
Knowing the difference between want and need will help you prioritize your expenses. By curbing spending on expensive wants, you can truly afford the things you need to live a healthy and happy life.
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Consumer Education Services, Inc. (CESI) is a non-profit service provider of comprehensive personal financial education and solutions for all life stages and for all of life’s milestones. Our goal is enhanced economic security for everyone we serve.
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