what's the difference between your money wants and your money needs

Is there a Difference Between Needs and Wants?

When we are on a diet and hit the plateau how do we usually conquer it? If it were me, I would make changes to what I’m eating and my current exercise routine. Just a few small shakeups here or there usually do the trick. 

The same thing applies when you’re on the Black Girl Money Diet. In today’s task, we need to examine our money plateau. How do we do this? We need to classify our expenses as either a need or a want.  Is there a difference? Yes! So, what’s the difference between the two? Let’s take a look, shall we?

Here’s how the dictionary defines need:

require (something) because it is essential or very important

Okay, so to think of something as a need it has to be a necessity. A basic human need. I would consider a need anything that I couldn’t live without. Something in my daily life that takes me from A to Z.

What are example of needs?

  • Housing
  • Transportation
  • Food
  • Clothing
  • Health Care

Now let’s take a look at the flip side. If those are needs then what is a want? Per the dictionary, a want is defined as:

have a desire to possess or do (something); wish for:

There it is right there in black and white. See the difference. A want is a discretionary item. It’s not a fixture in life. I think of wants as being Instagram worthy

What are example of wants?

  • Traveling
  • Entertainment
  • Dining out
  • Subscription services

Could we live without all four of those items? Of course, we could. However, it would make for a boring life but they are not things that are needed for survival during an apocalypse. Or better yet, a pandemic. Okay. Okay. How about three of the four? Netflix did come in handy.

declutter your mind saying

Do you look at things differently now? I do. A year without wants provided much clarity. It allowed us to take time to examine our lives and consider the little things. To think about ditching the excess. To trim the fat.

Needs vs Wants List

Now it’s time to get to the main purpose of this task. To conquer our money plateau. First, find a piece of paper or grab your journal. Create two columns: needs and wants. Examine the first six expense categories. Take a long look. Let it sink in. Now place each item in its appropriate category. Look at the details.

Finished? Not quite yet. One important thing to do when you are piecing together a needs vs wants list is to ask yourself this: is one of my needs masquerading as a want? I know. I know. Things just got complicated.

Take for example what I disclosed a few weeks ago. I need to purchase a new car. So, transportation is a need for me but what type of transportation?  Will I go for the economy-size car and stay within my budget or will I get suckered into going the luxury car route and double down on that shiny new Tesla? Decisions. Decisions.

Here’s another one: I have to return to the office. I need new clothes. Wait. Or is it that I want new clothes? I keep seeing these ads for the personal stylist subscription service Stitch Fix.

My first thought: that’s something I wouldn’t mind trying. But is that something I need? That all depends. I’ll let you know shortly after we complete the cash flow analysis.

Now look over your list again. Take off those rose-colored glasses.  Look again. Do you have any needs masquerading as wants? If so, move them to the want column.

We’re almost at the finish line. To complete today’s task, we need to take our revised needs and wants list and sum each column.

You’re finished. Keep this information handy, we will need it again shortly. 

See you next time. Thanks for reading.

BGMD Editorial Team

Teigh Reed is the Content Editor for BGMD. I have a passion for all things finance-related. I'm on a mission to pay forward my knowledge of money and to cheer on your accomplishments. What's on your money mind? I'm listening.

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