Sifting through Needs and Wants

Posted by MoneyThinker in smart money tips | 1 comment

I was looking through stuff online the other day, and I discovered that a video game that I wanted was on sale. I’m a bit of a gamer, so I love playing games and checking new ones out. I sat there on the “buy” page for awhile. And I just sat there. And sat there more. I kept moving to click the “buy” button, but I just couldn’t do it. I couldn’t justify the purpose.

Sometimes it’s obvious when something is a want instead of a need. We waste a lot of money on stuff we convince ourselves that we need but really, in the long run, we just want it. But what do we do in those times that we really can’t figure it out? What can we do in order to try and bridge that gap? How can I tell if something is a need or a want?

- Is it frivolous? Usually frivolity is easy to catch. The video game would have been a frivolous purchase. A new CD is frivolous. A new car or bike when your current vehicle is perfectly fine is totally frivolous. If you have the money to buy something frivolous, it’s not necessarily bad to get something that you want, but if you’re struggling for cash you may want to rethink it.

- Is it beneficial? Okay, this is a bit harder to figure out. Some of us are really good at justifying how beneficial something is or isn’t. Some of us think that just as long as something makes us feel good that it’s beneficial. That’s not exactly what we’re looking for here. Could it help you out? If your vacuum cleaner is on the fritz but still kind of works, getting a new vacuum really is beneficial to you. Figure out if that new thing you’re eyeing is beneficial or just sounds or looks good.

- Is the result worth the cost? Here’s a great question to ask. Is it beneficial enough to justify how much you’re paying for it? This is a good question to ask when you’re thinking about going out to eat. Is the result (a full tummy) really worth how much you’re going to spend on the meal? Or will you look at it later and realize that you ate way too many calories and are now down $10 you could have used for something more beneficial. This goes hand in hand with the last question. 

- Will I regret this purchase later? This is a question, even for beneficial purchases. “Could I have waited for it to go on sale instead?” If you’re struggling for cash, it is really hard to swallow your pride and wait, but really, in the long run, it’s worth every week that you waited for the price to go down. So even if you can argue the above three in one way or another, you may be able to look at this question and realize wait, I may regret this later on.

Do you struggle with figuring out whether something is a need or a want? How do you determine the difference? Leave some thoughts in the comments, and, until Thursday, spend smart, save smart!