Insights

By Ben Joergens 06/13/2018

VIDEO TRANSCRIPT

Do you know the difference between wants and needs when making purchase decisions?

Well, there are different types of expenses, wants and needs, that impact your short- and long-term finances.

And the decisions you make about purchases and expenses impact your budget. 

What is a want?
A want is something that is not essential to survival, but that you would like to have. These could include the following:
•    Designer clothing
•    Cable or Satellite television
•    Video games
•    DVDs
•    Cell phone

What is a need?
A need is something that you must have for survival.

These could include:
•    Food
•    Electricity
•    Water
•    Clothes
•    Shelter

Needs also may include items that will help you accomplish your financial goals.  

So, let me ask you, Is a computer a need or a want? 
A computer doesn’t fit the traditional definition of a need but consider this example. You are a student attending college and of course, the main goal in college is to get a better education. With more education, your chances increase for a better job to make more money.  In this scenario, a computer could be considered a need as it will help you accomplish a financial goal.

Thank you for watching today, hopefully, you have a better understanding of wants vs needs. To continue your financial education, look for additional Real-Life Finance videos from Old National.