Most of the choices we make with our money are governed by our tastes and heart. In general, whenever we take a decision financially, it depends on our needs and wants. The difference between a need and a want may not be obvious all the time, and there is a difference in opinion amongst us in the definition of a need or a want.
For instance, clothing is a need, but what about the place where you buy clothes from? For some, that may constitute as a need, and for others, it may be a want. If one has a lot of money, the difference between a need and a want may not matter much, but for most people, there is a line between these two, with different people having different ways to decide how it is separated.
What exactly is a need?
Need can be defined as a commodity without which you can’t live and live a safe and secure life. Food, shelter, clothes, transportation and basic utilities constitute the basic needs. Everyone agrees that these “needs” are there for everyone. Within these needs, there are issues and discrepancies among people.
What is enough and how much is too much?
An example of “how much is too much” is the requirement of a house. What is the right size of a house? There are different standards for different people and it all comes down to the choices we make and what we like. For someone who can pay off the money for a big house, it is not a big deal, but is it a need? The same thing goes with cars. Do families, with only a couple and an infant, need two cars?
Having a big house or more cars are not bad in any way, but having them is not a need. It is a want, according to me.
How to build wealth by controlling the needs and wants
The most effective way to building wealth is to know what you need and what you want. Building wealth means paying your debts off first. To pay your debts, you need to make sure that you focus on your needs at the moment and not your wants. You should delay the wants until you can afford them. For example, if you are someone who is obsessed about technology, you’d want to buy every new thing coming to the market, from phones to LEDs to the 3D printers. Since the technology is changing so quickly, you may be thinking of buying the newest things possible. Controlling this desire is important to make good use of the money you have.
Just by delaying the satisfaction of new things and purchasing your wants, you can achieve the financial goals of your needs. This way, you will end up saving more money and be a wealthy individual while your retirement.
Trying to control your desires
If you cannot control the desires for some wants, just think of the people whose needs aren’t being met. There are millions of people in this world, who don’t even get half of the basic needs. This isn’t for making anyone feel guilty that they have more than others, but this is the sad reality. By not buying one of your wants, you can contribute the money you save to improve the lives of such people. Now this does not mean that you don’t buy anything for yourself, but you can buy stuff which covers your need more than your want. For example, instead of buying clothes from an expensive designer, you can buy from some other store and save some money on that.
Needs and wants have a very fine line of difference. It is, in reality a choice for you – what you need and what you want.