"Needs" Vs. "Wants" and the Importance of Knowing the Difference

At FamilyMeans, we practice what we preach when it comes to financial education. Our staff are able to communicate financial pitfalls and tips people should look out for in their everyday lives to help them balance their budget, because they follow the same advice. One of our staff members, Eli Snyder, discuss the importance of understanding "needs" versus the "wants" in your families financial budget ...

needs versus wants

Have you ever noticed, despite our American Lifestyle level being one of the most affluent societies in world history, we still hear a lot of folks say things like “I just don’t have enough money to make ends meet”?  I have to admit I have occassionally even said similar things over the years.

Now I’m not talking about those in our society who truly find themselves in poverty's grip, worrying where their next meal is going to come from. I’m talking about the 43% of Americans that a 2006 Pew Research Study found actually spend more than they make each year (hence the existence of an $18.5 billion a year credit card industry) and yet echo all too often the sentiment above. I propose the majority of our modern problem is not found in our not having enough money to meet our basic needs, but rather that we tend to gravitate towards a warped perspective of what “needs” actually are.

That same Pew Research Study (entitled “Luxury or Necessity”) revealed that 17% of the American populace in 1996 believed Cable TV to be a “need” rather than a luxury, while that number has grown to 33% as of 2006! Similarly, many people view other items like cell phones (49%), high speed internet (29%), flat screen TVs (5%), and even ipods (3%) as “needs” instead of “wants.”

I understand human beings have many needs that range from physiological to self-actualization, but we must all resist putting the cart ahead of the horse in terms of confusing luxuries with needs. Let us fight to keep a correct perspective that basic food, clothing, and shelter must always come well before all of the other luxuries in life that we all too often take for granted. And by doing so we might find ourselves, at the end of the day, in a more grateful and satisfied place.

Want to learn more about how understanding your family's financial "wants" versus "needs" can help you control your budget? Contact FamilyMeans' Financial Solutions services today to learn more.