This is a continuation of my Money Plan Series where we learn how to maximize our money. Earlier I wrote about finding our values (click here for post). Discovering our values will help us better understand our money and how to use it wisely.
Now that the 3-day weekend to celebrate America’s Birthday is behind us, it is a good time to reflect on how we spent our money. Yeah, Independence Day deserves celebrating but this doesn’t mean we go crazy and empty our wallet.
Think about what you bought or activities you spent money on. Were the things you spent money necessary for your life? Was it important to you or your family?
Needs
All of us have basic things that we need to live. These needs usually include food, water and shelter.
Each of us have different needs and our needs can change at different points in our life. A need when you have job loss or birth of a child is different from when you are retired or just graduated from college.
Wants
In addition to our needs, we may have other things that we want. These wants or extras enhance our life or make living more fun and comfortable.
Wants are things that you love doing or having but do not need as part of your daily life. Wants can be plasma TV, eating in restaurants, high-end appliances, etc. Although each us may have different needs and wants, it is important to make sure your basic needs are met.
4 Questions to ask yourself about Needs and Wants:
- Do you really need it?
- Will it help me reach my short-term goal?
- Will it help me reach my long-term goal?
- Can you live without it?
Grab a glass of cold water, settle into your favorite chair and spend some time figuring out your needs and/or wants. Here is a list of items to get you started.
Download the Need vs Want Worksheet as PDF
Download the Need vs Want Worksheet as Excel
Can you think of more needs or wants? If you are not sure if it is a need or want, try going one week without it.
