Needs vs Wants – A Simple Exercise

Traditionally we all think of Needs as the things we must have in order to survive and Wants as luxuries or indulgences that we should try to do without. BUT …. I would like to challenge that way of thinking.

Start by looking at your monthly expenses. Look at where your hard-earned money is being allocated each month. This is a painstaking task but well worth it in the end. You will have items like rent, mortgage, car repayments, food, mobile phone contract, home wifi, insurances, medical aid, car maintenance, gym memberships, restaurant bills, haircuts, treatments, wine, gifts, coffees, Dstv, Netflix, petrol, pets, vet bills, gap cover, clothing account etc., etc.

Now spend some time looking at these costs and allocating them into two columns. Needs and Wants.  Remember without our Needs being fulfilled we will perish. Things you can’t live without, like food, shelter, clothing and wifi perhaps?

Wants on the other hand are the things that would be nice in our lives but in our minds are a bit of an indulgence. Wants are quite personal and will differ from person to person. Wants are sometimes aspirational. You will survive if your Wants are not fulfilled but life would be so much better if we had a few of these Wants fulfilled. Wants are the things that are important to you and that you believe will make you a happier person!

A couple of examples of Wants could be taking time out to study further, doing an expensive once in a lifetime trip with your family, a wine course or eating out once a month with an old friend.  Perhaps your wants are more material in nature like a beautiful watch you have always wanted or a piece of jewellery.

At this point of your exercise you are most likely going to have quite a few costs that are unallocated. They aren’t necessarily Needs (as you can live without them) but they aren’t really Wants either. They are just there every month and quite frankly are not that important to you.

Now take a clean sheet of paper and jot down the things that are important to you. Write down your Wants, let your mind wonder a bit and come up with some ideas of what you would like to spend some of your money on that would really bring you joy. You may not have the money to do so but let’s dream a bit here. Come up with what’s important to you on a list.

That course you have always wanted to do, that trip you have been thinking of but felt it was too much of a luxury, a three-day trail run at the end of the year that has always felt too expensive to take (time and money wise). Or perhaps it’s that beautiful watch you have had your eye on for so long now.

How many of the Wants that you have listed are actually on your monthly budget? My guess is not that many.

What’s happening here is that your hard-earned money has been allocated to things you believe are your Needs but actually aren’t – you’ll easily survive without them. You think you Need something and it gets on the list and it stays there but it isn’t a Need and, more importantly, it isn’t a Want either. 

Somehow (and it happens to all of us) money is being allocated to things that aren’t Needs and most importantly denying you of funding for your Wants.

Remember Wants are the things that are important to you. The things or experiences that will bring you joy.

I challenge you to get control over how you allocate your money. After all it is your earnings – you should have more say as to how it is spent. Ensure more of your Wants are on that list as opposed to your perceived Needs.