NEEDS OR WANTS

 

Some needs are easier to nail down. You need a place to live, clothes to wear, and enough food and water to maintain your health - these are the elemental things that you need to survive. They are indispensable. You can argue that everything else is not imperative, but this is where the lines start to blur. The reality is, we make many of our purchasing decisions subjectively rather than objectively.

Other purchases can technically be categorized as a need, even though most would consider them a want. Does eating an expensive meal at a high-end restaurant qualify as a need? Or what about clothes? Do you have to stick with generic sneakers or can you splurge on a pair of expensive Adidas? Ultimately, it is all about perspective and how you choose to manage your money. 

Deciding Between Wants and Needs.

Figuring out how to divide your income and prioritize your expenses can be as simple as putting everything down on paper. The practice calls for listing your wants and needs individually in four different categories. The visualization technique allows you to see where your expenses fit clearly.

Categorizing your priorities, the chart allows you to list your wants in one column and your needs in the other and then divide the columns in half and designate the top choices as a high priority and the bottom as low priority. From there, you can make informed decisions.

You end up with the following four categories:

• High-priority needs.
• High-priority wants.
• Low-priority needs.
• Low-priority wants.

Try out the MoSCoW method, which stands for Must Have, Should Have, Could Have, and Won't Have. The MoSCoW prioritization technique, involves breaking things down in four different categories. This method help you to clarify which things should be the highest-priority items in your budget.

Appreciate What You Have.

Once you become better at differentiating between wants and needs, you will probably see that you have been able to fulfill more of your desires over the years than you realized. And that can be a significant turning point.

When you find things that you want to buy or do that you currently cannot afford, it becomes all too easy to focus on those things to the point of overlooking what you already have. Take time to reflect on all the ways that you have been fortunate and the needs you are able to meet every day.

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