How to Identify Wants vs Needs?

 Disclaimer

All Information provided on this website (THE MONEY UNIVERSE ) is for Educational & Informational Purposes only. I am not a SEBI Registered Financial Advisor, Analyst or Broker. 

Introduction

Many people spend money on different things and where there money goes. It is the most important thing to understand for any person what a need is and what a want is in for their life. they don't know how to spend their money . This awareness can change in your financial life. so , dear readers in this article I will help you to understand needs vs wants , what's the difference between needs and wants with examples . 

What Are wants ? 

in simple words, wants are desires or wishes .They make life easier and enjoyable . Wants have no limits because humans always to buy expensive things. because Humans always buy unwanted and unlimited things. That is why they called wants. 

For Example 

Many people want to buy

 An expensive car 

 luxury watches 

stylish expensive clothes 

An expensive home 

expensive bikes 

expensive mobile 

Expensive foods

expensive travel

expensive shoes 

 expensive things in your home 

A luxury apartment

luxury hotels 

What Are Needs

Needs mean always buying necessary things and avoiding unnecessary things. They are limited and people always buy the necessary things. Needs are always good for you to help you to live a simple life.Needs always to help you to save money and makes life easier. 

For Example

Foods 

grocery products

Normal clothes

Normal bike 

Health care or medicine

Room rent 

education expenses (Notebook , pen and books) 

electricity bill 

drinking water 

 Mobile Recharge

Normal shoes 

cooking gas cylinder

collage or school fees

Doctors fees

bed for sleeping

Taxes

What Is the difference Between wants and Needs?

Wants vs Needs

wants

Wants are non- essential things. People have unlimited desires like luxury watches, cars, stylish clothes and other luxury items. The most important thing is Ask yourself Do I really need these expensive things, watches, expensive clothes, expensive car and can I live without these thing if your answer is yes, then you should focus on needs because they are essential for you. 

For example expensive car, bikes, I phone, travel and other things. 

Needs

Dear Reders Needs are essential for your life you cannot be ignored. without needs you don't live your life. Needs are nacessery. Ask yourself Do I really want these avoid expensive things like watches, bike and car 

For Example, water is a basic need, food, clothes, these are basic needs for survival. 

How to Identify wants and Needs

1.Survival Test 

If you have a product and you can't live without this product then it is a need, and if your answer is yes so it is a want it is a desire. 

2.Ask yourself is it Essential Or non essential? 

if you want to understand what is essential and what is non essential

ask yourself do you avoid daily useful things? if your answer is no, then it is essential for you. like water, food,a bed, electricity, slippers, and others items. if your answer is yes ,then those are non essential items. 

For example expensive bike, luxury car, branded clothes, and other things. 

3.Make 50 30 20 Rule 

If You want to know what is needs and wants then you create your budget and apply this rule. this rule will help you to clarify to wants and needs . in this rule write on a paper on 50%is your need of your income and 30%are wants, and 20%is your wants. 

4.Check Your Budget

if you wan to know what is your needs and wants then check your budget. 

For Example Your income is 15000$, in this income your house rent is 3000$, grocery products expenses are 2000$ and your mobile recharge is 500$ , your electrycity bill are 2000$ your essential any product 3000$ and then final your savings are 4500$.

5. Asky Yourself Why i am buying 

in simple words before buying any product in a shop ask yourself, why I Am Buying this product? Do i really need it . because many products are wants only and wants are unlimited .so you have to understand what is essential and what is non essential.Buy always wisely and avoid unnecessary things and save money. For example grocery products are essential, while expensive food items are non essential item's.  

6.Check Your Financial Goal 

If You have a Financial Goal then you should think before buying anything. because if you don't analyze your budget where your money are goese. so don't expect you can achieve your financial goal like you become a rich person or build your wealth. so most important thing is to check your financial life and clarify what is essential for and what is non essential

7.PayYourself

This is most important thing. it means invest in your knowledge, your health your basic food these are needs. don't buy and invest unnecessary things like expensive bikes, cars, luxury watches, expensive travel, 5 star hotel rant, vip foods, branded expensive clothes. 

Consultation

You have to understand the difference between needs and wants. Dear Readers the reason is that wants can always to be lost your money they are never limited . Many people are traped in wants and desires any they buy lot of luxury items like expensive cars bikes any other expensive products These wants is not good for your financial life. needs are essential like foods, water, electricity these are essential. you can't imagine your life without them. so our advice is understand what is your need and save money for a good financial life.