Welcome to the world of smart money management. One of the first steps to financial freedom is understanding the difference between wants and needs. This will help you make better decisions with your money, whether it's your allowance, birthday money, or any other funds on your kids debit card. Let’s dive in and explore what these terms mean…
What Are Needs?
Needs are things that you must have to live a healthy and happy life. These are the essentials that you can’t live without. Here are some examples:
- Food: You need food to grow, stay strong, and have energy.
- Clothing: Clothes keep you warm, dry, and protected from the weather. They are necessary for your daily activities.
- Shelter: Having a safe place to live is a basic need. It’s where you sleep, eat, and spend time with your family.
- Education: Learning is essential for your future. Going to school and having the materials you need for studying are important needs.
What Are Wants?
Wants are things that you would like to have but can live without. They are fun to have and can make life more enjoyable, but they aren’t essential for your well-being. Here are some examples:
- Toys and Games: While toys and games are super fun, they aren’t necessary for your survival or health.
- Snacks and Treats: Snacks like crisps or sweets are tasty, but they aren’t needed for a healthy diet.
- Fashionable Clothes: While basic clothes are a need, having the latest fashion items or branded clothing is more of a want.
- Entertainment: Going to the cinema or amusement parks is fun, but you can have a great time without them too.
How to Decide Between Wants and Needs
When you’re thinking about spending your money, it’s important to ask yourself whether what you want to buy is a need or a want. Here’s a simple way to figure it out:
- Ask Yourself: Do I need this to live, stay healthy, or do well in school?
- Think About the Future: Will this help me in the long run, or is it just something fun for now?
- Prioritise: Make sure your needs are covered before you spend money on wants.
Think smarter with your money
This is not to say that you should never spend money on the things that you want. As money is also there for you to have fun with! However following these tips will ensure you don’t blow it all at once:
- Save for Big Wants: If there’s something you really want, like a new game or toy, save a little bit of your money each week until you can afford it.
- Budgeting: Divide your money into categories – some for needs, some for wants, and some for savings.
- Talk About It: Discuss your spending choices with your parents or guardians. They can help you make wise decisions.
Understanding the difference between wants and needs is a big step towards becoming a smart saver and spender. Remember, it’s okay to have wants and enjoy fun things, as long as you make sure your needs are taken care of first. Start your journey with the bex app and happy saving!
