You’ve tried everything, and your budget just isn’t working. You’re struggling to come up with the difference between needs and wants for your expenses.
How do you know when something is essential and when it can wait for another time? And once you figure it out, how does all of this affect your budget?
You’ll find a needs vs wants list here, plus budgeting ideas.
What Are Needs and Wants in a Budget?
Deciding between a need and a want is super important for your budget to function. This is especially true if your income isn’t high or you have a lot of expenses.
So what are the differences, and some needs vs wants examples? A quick overview is that needs are items you have to have in order to survive while wants are things that are nice to have but not necessary.
What is the Meaning of Needs?
What is a budgeting need? Needs are things you can’t do without and are necessary for survival.
They is essential for you to function and live a healthy life. All needs should always be a part of your budget.
So, when you’re wondering if something should be added to your financial priorities, ask yourself, could I live without this?
How would my life be affected if I didn’t have this? If the answer is no, I need this for survival, then it’s a need.
What Is the Difference Between Wants and Needs?
As you know, a need is a requirement for life. But wants are different.
A want is something you’d like to have that makes your life better or increases its quality. You can live without wants, but they enhance your life. This is important to remember when budgeting needs vs wants.
Is Money a Need or Want?
Money allows us to buy goods and services that we need and want. Having an amount of money that will enable you to pay your expenses is necessary.
Having excess money beyond this is a want. But some money is definitely a requirement for life.
Is Transportation a Need or Want?
Transportation is considered a need, but it can take different forms, depending on where you live. Most people require a car, a bike, or at the very least a bus or subway pass to get to their destinations.
Since you need to get to work, your home, and out to run errands, you need some form of transportation. The only way to forego the expenses of transportation entirely is if you live somewhere that is so close to your job, grocery store, etc., that you can walk everywhere.
Is a Car a Need or a Want?
This depends on your individual situation. Is a car a requirement for your job? Do you often have to go to different places throughout the day to do your work? In this case, a car is a need.
If it isn’t required for work, but you still need to go places, are there other types of transport that could meet your needs? This might be a bus pass, a skateboard, or a subway. If you can use one or several of these modes of transport, you may not need a car.
Example List of Needs
The following items are needs that every budget should include. You can’t go without these basics, so make room for them with your finances!
Food is absolutely necessary for your life. This means food that is nutritious and filling, but dining at a fancy restaurant is a want.
While basic food is necessary, there are many more expensive options you can forego if you’re trying to save money, like takeout.
This is absolutely necessary. You need drinking water and water for your home to survive. This is always a need and never a want.
This means living somewhere safe, warm, and a place that provides for your basic living needs. Your home does not have to be fancy or expensive.
Still, it does need all utilities like electricity, water, heat, etc., to be an adequate shelter. It could be a studio apartment or a mansion, as long as your basic needs are taken care of.
A home that’s large enough to house your family is a need, extravagant housing is a want.
4. Medical Care
You need to be able to go to the doctor or the emergency room if necessary. Prescriptions and medical care are essential things and not wants.
This category should always be included in your budget as a need since it can get expensive quickly if you don’t have savings for it.
This includes a basic phone to call people and the internet. Since both of these are so often needed for communicating at work and with relatives and friends, it can be considered a need.
But only in its basic, most inexpensive form, not with the newest tech. Think flip phones for this.
6. Basic clothing
Everyone needs clothes that are warm and sturdy. But all we really need is basic clothing, not the latest fashions for everything. You need a couple of pairs of shoes, jackets, shirts, and pants that are basics, not overly expensive.
Instead of buying retail, you can save money by thrifting or consigning clothing.
Example List of Wants
This is an example list of wants. Wants are things that you’d like to have, but they’re completely non-essential.
A vacation to pretty much anywhere, even for the weekend, is a luxury. You’ve probably heard people say they “need” a vacation. But this isn’t true.
Vacations are a chance to get away from your day-to-day activities, usually in some exotic location, and they are tons of fun. Still, it falls into the “want” category.
Keeping that in mind, if you can fit a vacation into your budget now and then, it’s a wonderful idea.
2. Gym Membership
While physical fitness is necessary, this can usually be accomplished for free. You may enjoy going to the gym to use the equipment or take classes, but it’s a want, not a need.
Since you can bike, walk, or jog outdoors for free, and there are plenty of home gym options, a gym membership is a luxury.
Entertainment is fun, and it makes life more enjoyable, but it’s a want. Fun activities like concerts, going to the movies, or getting tickets to theme parks, are great things to do now and again, but they can be saved up for slowly. That way, your budget can cover your needs first.
4. Dining Out
Dining out includes going out to eat at restaurants and ordering food for delivery or takeout. Food is essential, but dining out isn’t.
It’s a want because it’s convenient and entertaining, but you can get by without it. That being said, if you can include it in your budget, it’s OK to do so.
5. The Newest Technology
While communication is necessary, having the newest iPhone or the best internet connection is a want.
You can live life without it, but it can make life easier and help you at work and home. So having the newest laptop or gaming system is fun but for sure a want and not a need.
6. Streaming services
While it’s nice to have television options, it is not necessary. Streaming services are definitely a want, and they can become expensive, especially if you are paying for several at once.
If you need to make some cuts to your budget, Netflix and other streaming services can be removed. Or see if you have a friend who would want to split the costs of a service if the service allows unrelated people to share logins.
What are some wants in life?
We all have things we want to buy. And if your budget allows for it, it’s great to buy some of the things you want. But it isn’t okay to purchase wants instead of needs and not be able to pay for the essentials.
Often, needs are just basic things, but it becomes a want when we desire the best and most expensive version of that item. Here are some more examples of wants in life.
Not just clothes, but designer clothes
Clothes and shoes are a need. But designer clothing is always a want. It’s more expensive, and while it may be high-quality and last a long time, it is basically the same as regular clothing, just much more costly.
Many people like to save up for designer items like handbags or clothing made of excellent material. This is fun to do and is fine as long as you can afford it.
Not just food, but certain kinds of foods.
Everyone needs food to provide nutrition. But basic fruits, vegetables, grains, and proteins are not all that expensive. If you enjoy eating very specific foods, that is a want.
And you may choose to spend your extra money this way, but know that anything beyond basics is not a necessity.
Not just transportation, but a certain kind of vehicle.
A used car that gets you from point A to B is a necessity for many people. But a brand new luxury car is a want.
Actually, any type of expensive vehicle that provides more than the basics for an automobile is a want. Some people like having a car like this, and it’s something to save up for as you can afford it.
How much should I budget for “wants?”
After you pay for the things you need, you may find that there’s room in your budget for some wants, as well.
But how do you budget for that? How can you decide if an item is too expensive or what is worth saving up for?
The answer to this depends on you and your finances, but here are some ideas to keep in mind to help you decide.
Depends on your goals.
How much you budget for wants depends on your goals – both for life and finance. As an example, let’s say you’re in your thirties and plan to retire in your sixties.
You have lots of time to save, so you may be comfortable spending more on wants in the meantime. On the other hand, if you save half of your income and your goal is to retire in five years, you likely won’t spend much on wants.
Your goals for your life and money are up to you. Base your decision on what matters the most for you and your family. If you aren’t sure how to set goals, check out this article.
Depends on your values.
Your values allow you to decide what’s essential for your lifestyle. Some people even practice value-based budgeting, spending more money in the categories that matter to them.
If you value travel, which is a want, and you can afford it, much of your extra money may go towards that. Or, if you value saving, you may choose to spend less on wants and more on investing options.
Take a look at what truly matters to you – not what you think should matter but what actually does – and spend according to that after paying for your needs.
Depends on the funds available in your budget.
Just because you want something doesn’t mean you can afford to buy it. Your budget and income matter a great deal. You may want a pair of designer shoes, but if you pay for your needs and are then left with $100 each month, this want could take some time to save up for.
Knowing how much money you actually have saved and how much you make each month matters. Be realistic about what is affordable and what needs to wait until you have more money available.
If you realize you don’t have enough money for wants after paying for needs, consider alternatives, like starting a side gig, or working extra hours.
Knowing the difference between wants and needs is important when deciding on a budget.
So, that’s the needs vs wants list! Wants and needs are both things that require money, and both can be added to your budget. But the order is essential.
You should always pay for needs before seeing how much is left over for wants. And that requires knowing the difference between the two, which should be easy after reading this article. You should have some budgeting needs vs wants financial literacy now.
Remember to budget for your needs each week or month and save up for wants, buying them as your budget allows for them. Patience and being willing to save money really pay off over time.
You can budget for all your needs and some of your wants; just keep a good perspective, and you’ll do great.