Wants vs Needs

This article is not going to be about specific tactics. Instead, I’m going to talk a bit more about a concept I discuss frequently – Wants vs Needs (and Importance as a bonus).  The concept itself is rather simple. What You Want vs What You Need.  Let’s dive into it.

 Now, I am not going to get into Maslow’s Hierarchy of Needs because this isn’t psychology class.  However, I think we can all agree there are basic needs everyone has, from food to shelter to feeling secure.  I thought I would instead focus on some recent conversations I’ve had with family and friends.

My older son is now studying from home. We took one of our dogs for a long walk the other morning and talked quite a bit. The conversation of Wants vs Needs came up. He mentioned part of the reason he is studying marketing is because he looks back on some of the things he has bought and realized while he didn’t need them, he wanted them due to their good marketing.  I guess he wants to follow in those footsteps.

Our conversation then fell into one talking about cars. I have a friend who said his next vehicle needs to be a truck. A few of us were asking him why. He doesn’t have a boat, doesn’t need to tow anything, doesn’t haul anything, lives in the city and never goes into the woods. He finally said – “Listen. Maybe I don’t need a truck, but I want a truck.”

I’m in the same boat, or car in this case. My car is 11 years old and has 200,000 miles on it. I could stand to buy a new one, but I don’t need one. Even before the virus, I hadn’t been putting that many miles on it the past few years and mechanically it is in good shape (knock on wood).  The only reason I would buy a car now is because I want to as my need for a car is already fulfilled. However, I would rather spend the money that would go into a car payment into a vacation with my family.

The reason I bring this up is because I frequently have conversations about the importance of money. While money is money, it’s why/purpose is very personal. For some people having more money means they can retire earlier. For others they may want to figure out how much money they need so they can slow down and not work so much while their kids are growing up. Others might have a desire to start their own business or make sure there is enough money saved to pay for any education their kids want. Ultimately, the reasons are endless because they are personal.

One benefit of everything going on is many of us have an opportunity to see where we spend money on a regular basis, whether it is hitting Starbucks every morning, dining out four times a week, or buying that new phone every year. Some of these spending habits are now curtailed. Maybe this gives us a chance to figure out what is really important about money to us. I know it has for me.

Ultimately, I’m not saying you should cut out those things you want. I’m simply saying it is important to understand what is important about money to you. If you understand this better some of those wants turn into needs due to their importance. To get super personal, both my parents passed years ago so spending time with my wife and sons is the most important thing about money to me.  It has turned into a need in my situation.  So, although people I pass on the road may be impressed by a brand new car, I would rather spend that money on time with my family because that’s my want and my need, and why money’s important to me.