What is the difference between a need and a want?
According to the dictionary.com, a need is “a requirement.” Which means it is something a person needs to survive. A want on the other hand is “something desired,” which means it adds pleasure but isn’t necessary.
Why should we distinguish between needs and wants?
When you are looking at planning out your finances or creating a budget, it is important to first look at your needs. Your needs include food, water, clothes, and shelter. These are the basic things you have to have to make it through the day. Beyond these, they’re all wants.
When you setup your budget, its important to identify these needs and set aside money to be able to pay for them. Once those moneys are in place, the remaining amounts can be used to obtain some of the wants you might have or saved for a later date.
If we don’t take the time to identify the needs first, we might end up spending our money on wants. This will then not allow us to afford the things we need to survive.