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Do I “Need” It or “Want” It? It Can Be Confusing

There are a number of things we can do with any money that we get.  We can spend it. We can save it. We can invest it. Or we can use it to help others. At a young age, we don’t usually have a lot of money, but we can still make the same choices. It is a good idea to think about how you use any money that you have – and to try and use it wisely.

When it comes to spending money, you may have heard people talk about the difference between “needs and wants.” A “need” is something you have to have to get by and live a basic life – food, clothing, and a place to live. For some people, even being able to afford these basics, or necessities, can be difficult – and that is why many people who have more than they need look for ways to help out others.

“Wants” are those things that make life more enjoyable, easier, more comfortable and so on. That is, we don’t need such things to survive. They are things that each of us may want to enjoy life more.

But, for each of us, deciding what we need and what we want isn’t always easy. For some people, a cell or smart phone is an absolutely must – a need.  For others, it would be a nice thing to have, but it is not something a person needs to have. What one person sees as a need, another person may see as a want.  And, when it comes down to it, only you can make the decision. It often comes down to your values – and what you value in life.

That’s not to say that others won’t try and help you decide what is a need. Advertisers will often do their best to try and make you see that new phone, or new video game, or new running shoe, or new music album, or new soft drink, as something you simply MUST have. You may feel the “peer pressure” from others who have bought the latest “new thing” that makes you feel like you want it too.

But that’s when it comes down to answering the question “do I need it” or “do I want it” and should I be using my money to buy it. You have to make that decision. Over the course of your life, you will be faced with this kind of decision time and time again. You will have a limited amount of your money to “spend” – and you will have to decide what you are going to spend your money on.

You would be smart to always think about what you will be giving up when you make any money decision.  What is the trade-off – or next best thing you could be doing with that money? It would also be good to think about your values – and what is important to you. Try to let that be your buying guide more than the pressure you will feel from advertisers, friends, or others.

Making good money decisions is important – but it’s often not easy. It may take some will power – but it should always involve a moment or two of thought and the consideration of “do I need it” or “do I want it” and what else could I be doing with this money. If you think about that before a money decision, it is about the best you can do to try and make sure that you make good money decisions.

By Gary Rabbior
President
Canadian Foundation for Economic Education (CFEE)