What do you mean, when talking about buying stuff, by Needs and Wants?
Answer
While there are many different opinions on what this means, my own take on it is that Needs are the rational, left-brain framework of what it is that we're looking for when buying something, and Wants are the creative force that actually make the decisions.
Analysis
Before I dive into this question, let me preface it by saying that this is my own thought in this.
It seems to me that, even when we scratch the surface of this topic, that things can get pretty muddled pretty quickly. Why? Follow me down the rabbit hole...
Let's talk basics first. What is it, at least according to Maslow (here's a link to a wikipedia article about him and his theory), that we need? First come the physiological needs, such as Food and Shelter. So let's dive in on shelter.
We know we need shelter so let's now collectively visit a house (envision whatever type of house you'd like). So here's the question - do you need that particular house? And the answer should be pretty clear - no, you don't need that particular house. And in fact we can do this exercise for any given house, condo, apartment, shack, cabin, or hole in the wall. At some point, to make a decision as to what we'd like for shelter, we need to act on Want. Which runs counter to what people say you should do so as to be "financially responsible".
But it's true - in order to meet Needs, the actual decisions are made based on Wants.
And let's face it - Wants are fun! Wants are cool! It's Wants that put that kickin' stereo system in the black Corvette you just bought. Whereas Needs are just... boring. Rational. In a way, you can even look at Needs and Wants as the different sides of the brain fighting it out: the Left side dictating Needs and the Right side swimming in the glorious glow of Want.
It's when we act on Want too much that people get into trouble (we Need to keep a check on our Wants!). I think Needs help to establish a framework for certain Wants (such as a "nice house" or "a cool car"), but they also need to act as a limiting impulse on the relatively expansive feeling of Want. Because if we give in to Want too much or too often, we'll lose sight of the Need we're trying to fill.
And so purchases should be made with both sides, if not in total agreement, at least being allowed to chime in and argue their respective sides. For example, when buying a car, identifying the Needs surrounding the purchase (means of transport, protection from the elements, move many people plus cargo, practical, not too expensive, good with gas, etc) and also the Wants (good acceleration, cool colour, sporty, fun, etc) and finding a balance that is manageable.
This type of activity, of taking time to full consider a purchase from a Needs and a Wants standpoint is an aspect of what is often called "Being Mindful".
This post is part of a series on budgeting - Budgeting 101
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As always, comments and questions are welcome!
That's a fantastic attitude to hold and it really helps keep the purchases to a minimum. I know something that really helps is that space is at a premium and storage quite limited and so things that come into the space need to really be needed/wanted (an electric fan, a small fish tank, etc) and it has to have the space to live in the space. With there being very little storage space, a "mistake" can't stay in the space. Not to say that there aren't purchases that ultimately don't work out - those are ushered quickly to the donation bin.
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