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
• Cell phone
What is a need?
A need is something that you must have for survival.
These could include:
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.
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