When it comes to budgeting, separating needs from wants can be one of the most challenging parts. Whether you’re creating a monthly spending plan or simply tracking your spending, understanding what constitutes a need versus a want can help you make more responsible decisions about how to allocate your money.
In the most general sense, a need is something that you require in order to survive. Examples include food, water, and shelter. Without these essentials, you can’t function and will eventually die. The need for survival is universal and applies to everyone on the planet. You may also hear the term referred to as deficiency need or basic need.
A need is different than a want, which refers to something you desire or wish for but isn’t necessary for your survival. Examples of wants include a new car, expensive shoes, or the latest electronics. Wants are generally considered to be more frivolous than necessities.
The difference between a need and a want is often based on region and personal preference. For example, in the United States, the word need is typically used to describe a requirement while in the United Kingdom, the term want is often used to refer to an aspiration.
You may have heard the terms need and want used when discussing psychological theory. Maslow’s hierarchy of needs is a popular theory that outlines six different levels of human need, beginning with basic physiological needs and moving up to psychological needs. This theory states that if a person’s basic and psychological needs are not met, they will be unable to function effectively in society.
Needs are a central aspect of financial planning. By understanding the difference between needs and wants, you can better determine how much to spend on necessities and what to put toward savings or other goals. You can also use the concept of needs to avoid making impulse purchases that you may later regret.
The verb need means to be required or obligated to do something: I have to go, but I don’t really need to. It can also be used as an auxiliary in negative and interrogative sentences, as well as in questions and imperatives: Do you need anything? He needs to work. The modal need can be used to indicate a feeling: I have a need for vengeance. Need can also be used as an adjective: This book has a need for a cover redesign.