what’s the difference between needs and wants

[Awakeatnite]

If you are trying to save money and you are good at it and don’t fritter it away how do you decide what is a need or a want, how do you justify your buys and make sensible decisions

If I can manage fine without it, i don't need it.
Everything else is a want..

Look after the pennies and the pounds look after themselves is a true saying for me. Doesnt matter if something isnt expensive, if you dont need it dont buy it.

I allocate a budget, transferred into a separate account for wants. I have very few needs. Most of my spends is wants.

Need is something that is required to perform my basic functions or to survive - warm enough clothes, food and nutrition, transport, shelter.

Want is pretty much anything else.

On a budget finding a way to access a little bit of want is worthwhile. Either having a small discretionary budget. Or finding a free way to meet a want (e.g. i want variety in life, but that can be a picnic rather than a meal out).

Need is
accommodation
food
utilities
council tax
transportation
medical/dental insurance
weather appropriate clothing
phone/internet

everything else is a want I guess.

I have a spreadsheet for all the true essentials - rent, utilities, phones, internet, food, car insurance, petrol etc
Then I set a bit aside as my “buffer zone” - one of the kids needs new school shoes, DS has ripped the knees out of his school trousers again, school trip etc - the expenses that pop up periodically but aren’t an every month thing.
Then whatever is left is for “wants”.

If we really needed to, I know we could tighten our belts a bit more on the wants. For example, I know I could spend less on our food shop for example, but I like to say yes to the little luxuries the DCs like to have. I could buy a cheaper shower gel, but I like my slightly pricier one 🤷🏻‍♀️

Needs are bills (including insurances), food and savings for when the boiler goes, or the dishwasher, the car service. I’ve put the gym membership as a need too (I have all my yearly bills, like insurance, professional registration, car service and insurance, gym etc all added up and divided by 12 and treated as a bill).

Want is still like a sofa bed, I have a sofa, but I want a sofa bed for guests. Want is fresh flowers every week.

Whenever I lose sight of what’s a need, I look at Maslow’s pyramid 😂

I mean you know what a need is and you know what a want is.

You don’t need a lunch out but you do need to eat your squashed sandwiches that you brought from home

personally I think you sound like you “need” a budget and budget planning tool…not clarification on the difference between want and need

This nails it

It’s a tough question because I automatically think skincare- I have roseacea and very sensitive skin and while most of my skincare isn’t expensive (Cetaphil, avene and Roche posay), it’s enough that I feel it when everything inevitably runs out at the same time! It stops my skin burning so I’d call it a need but I could live without it, I’d just be a bit miserable!!!

I feel like you can make anything a ‘need’- a nutrigrain bar stops ds being hangry on the way to collect his brothers, a tub of grapes keeps me and eldest ds happy out, both would be seen as a bit of a luxury by my dh who would go a lot more basic and say the kids can snack on eg crackers and apples instead which are much cheaper

Save money for what?

I'm great at saving money for a goal, less so for the sake of it. Having no cushion makes me feel vaguely panicked so that's a motivation: get to 1 year's living expenses.

When I was saving money to buy a house, I lived very frugally but knew it was for a limited time, so it didn't matter.

A "minimum" amount went into savings on payday so that it was "gone" and couldn't be spent. It actually went into an ISA so that definitely couldn't be easily accessed. Then the day before pay day whatever hadn't been spent went into savings as well.

Breakfast was porridge 4 weekdays, Friday I got a croissant treat. Don't think I ate breakfast at the weekend? Maybe toast.

Lunch was soup I'd batch cooked at the weekend with bread I'd baked - mixed seed, twice a week to keep the two of us going.

Looking back at photos we were very thin 😅

Need is basically food and shelter and some other essentials for survival. Surely this is obvious. I agree with PP, you need to look at your spending and do a budget. Cash is actually quite helpful as it makes your spending much more transparent rather than just swiping a card

Good question OP and, for a lot of people, a big part of the answer as to why some people seem to have money, and others don't. Leaving aside people who can't even manage modest basic essentials and those who have more money than they'll ever spend in a lifetime, the biggest part of financial security for the majority is how they manage their money and the difference in what they spend day to day.

Eg if you spend £5 every working day on a want that you could do without, a nice coffee being the classic example, that's £25 a week, £100 a month, over £1k per year, or £10k+ per decade, just on one apparently inconsequential 'it's only a few quid' spend.

Apply the same thinking to other things like other food and drink out of the house, days out, holidays, clothes, beauty treatments, tech etc etc and the difference could be hundreds if not £1k+ pm.

But on needs vs wants, what's right for you depends on your life stage and how much money you have.

The answer would be different if you were a young adult who was either renting or living with parents who was looking to save a house deposit, afford childcare, get out of debt, save into a pension etc vs if you were a 50/60 something who was mortgage free in their forever home with pensions, investments and emergency fund etc sorted.

Even for essentials like food, housing, utilities, car, mobile/entertainment packages there can be a significant 'want' component because the cost can vary so much between survival level and 'we have so much money we can get the nicest version without worrying about the cost' position.

If you're wanting to sense your own situation, MSE and the financial flow chart are a good place to start.

https://www.moneysavingexpert.com/family/stop-spending-budgeting-tool/

https://ukpersonal.finance/flowchart/

I do agree that, if you can, you should include some 'want' in your budget, even if in debt or saving for a house deposit, pension etc, but it's also worth being mindful of a pound spent on X, means that it's not available to spend on Y or Z.

I think that the answer to this is very very individual, and not a one-size-fits all approach.

Somewhere to live is a need obviously. But most of us live in more space than they actually need - I have a garden, my kids have their own rooms. That's a want then. But where do you draw the line.

Food is a need obviously. But I like to buy strawberries and blueberries for the kids snacks so that they sometimes have a treat at school because I won't send them in with chocolate etc. And I don't like aldi butter so I buy lurpack. And wine.

Unless you're living on foodbanks or mega rich its a question of balancing priorities rather than as simple as needs and wants. But in general I think that most people are happiest and least stressed when their outgoings each year are well under their earnings.

Questions I ask myself - Do I want it? Do I need it? Can I afford it? Do I really need it now? This mainly applies to craft items and clothing though but I've always say that I'd never prioritise luxuries and wants over food.

Its tricky sometimes because there are things like clothes which might fall.into either category. I don't need a new pair of jeans, but the dc do need new school trousers for example.

But I also think even the needs should be managed thoughtfully. So yes dc needs new school trousers, bit can I pick them up on Vinted for a reasonable price, do they really have to be brand new for example.

Car insurance is essential, but putting a bit of effort in and shopping around instead of auto renewing brings the price down a bit.

Needs = mortgage, utilities, car insurance, council tax, car tax, petrol, groceries, clothes when kids grow out of theirs or when something of mine gets worn out or doesn't fit me. Same for shoes. Medicines, soap, shampoo, conditioner, moisturiser, spf

Wants = other Skincare, makeup, clothes shopping for fun, perfume, meals out / takeaways, going to the pub, cinema, theatre, entertainment, gym membership, hobby equipment, new books

All our absolute needs come out of a joint account that money is transferred into monthly:
Bills
Insurance
Food
Fuel
I suppose everything else is a want really, but with caveats: I would say new boots because old ones have worn out is a need whereas new boots just because I like them is a want. Toothpaste is a need, fancy hand cream is a want. Food for dinner is a need, a bar of chocolate is a want.

This

Sometimes a “want” is a “need” in disguise - a pressure cooker or slow cooker to allow you cook decent, HM meals using cheaper cuts, may be a want, but it would help a lot longer term so could be justified as a need. Especially if you research it to get the best one for your budget and know it will save money longer term.

is that the sort of issue you are having?

▪︎Needs are what you can't do without.
▪︎Wants are what you can do without.

Wants, when you're saving, can also be divided into:
▪︎The want you can justify or think is worth it. (Then buy it if all needs are met already).

▪︎The want you can't justify or think isn't really worth it (If all needs and reasonable wants are met already, you can decide to buy it but it should take backseat to everything else).

Needs have varied for me over the years.

At one point I was stripped back to the following needs:
Mortgage payment 1 in 3 months (to stall the legal action)
Council tax
Prescriptions
Electricity by prepayment meter
Food
Formula

Things on the want list were:
Heating
Hot water
To pay the mortgage every month
House repairs
Phone
Internet
TV License
Pets
Shop bought nappies
Insurance
The occasional bus or train instead of walking
Toys
Paid day trips or classes for kids
Toiletries
Clothes other than hand me downs
Shoes

Needs are needs regardless if you can afford them or not. They don't stop being needs.

Heating and hot water can never be wants.

Heating and hot water were absolutely wants. I managed without a working boiler for a long time with small DC so no hot running water and no central heating. I really did want to have the £1100 I needed the fix the boiler but I also really did need that money for food.

I worked an extra six hour evening shift every week purely to save money for the boiler, saved every penny from that shift separately but it still took nearly a year. No money is no money.

I consider a gift budget a need too. If I couldn’t buy gifts for my family’s birthdays I would feel so awful. It’s not as fundamental as food and housing, but it’s next on my list and comes before my own wants.