Global Money Week - Understanding needs and wants:

20 March 2024

Global Money Week - Understanding needs and wants:
Firstly, we need to ask ourselves what is a need and a want when it comes to spending money and budgeting...
Need:  A need is a fundamental requirement essential for an individual's survival, well-being, and basic functioning. These requirements typically include food, water, shelter, healthcare etc.

Want:  A want is a desire or preference for something that is not essential for survival or basic functioning. Wants include a wide range of material possessions, experiences, or indulgences that individuals seek to enhance their quality of life or fulfil their desires.

It is important when you’re creating a budget that your needs are catered for and prioritized and set goals to save for your wants.  An Post Money Manager can make budgeting easier.

In a world focused on buying things, it's hard to tell what we really need from what we just want. We’re tempted by flashy gadgets, trendy clothes, and fancy cars. This makes it easy to spend too much, get into debt, and feel stressed about money.

To understand what you truly need versus what you want, focus on what's most important. Make a budget listing essential costs like rent, bills, food, transport, and healthcare – these are needs for a basic life. After covering these, use the rest for things you want, like fun activities or treats.

Before buying something, you need to ask yourself if it's really necessary for your happiness, or if it's just something you want in the moment. Think about how it will affect your long-term goals. Will it make you happy for a while, or is there something more important you could spend your money on?

Learning to tell what you need from what you want also means being happy with what you have. In a society where we're always told to buy more, it's easy to always want something new. But by enjoying simple things like time with family or being in nature, you can feel happy without needing lots of stuff. This is really important.

Understanding the difference between needs and wants helps you make smart decisions about money. If you focus on what you need and spend less than you make, you'll set yourself up for a stable financial future. It might mean giving up some things you want and being careful with your spending, but it's worth it in the long run!

In conclusion, learning to tell apart needs and wants is crucial for financial confidence. By focusing on what's truly necessary, spending wisely, finding happiness in what you have, and making smart decisions, you can make your money matter more and create a more stable and satisfying future.