Have you ever found yourself scrolling through Instagram, seeing something you want, be it a new water bottle or a planner, and saying “I need that.” ? Do you really need it, or seeing what other people have makes you want it? It doesn’t stop at physical things. What about awards? Seeing people achieve something you could’ve done or won, would you say “I want to be like them,” or “One day I’ll be like them” ?
Nowadays, the line between wants, needs and goals is blurred, facing promotions from different companies, trendsetters and ‘overachievers,’ so much so that it is getting ever so harder to get one’s priorities straight. No longer does one distinguish what they want, need, or do; it’s now blanketed and merged into one unorganised to-do list that one sets to complete, whether it be a long-time goal, short term want or a necessity.
Maybe if we knew the difference, we would look at our lives and our decision makings a little bit differently, but so much so that it can veer us back into a straight path rather than taking multiple roundabouts.
So, what’s the difference between wants, needs, and goals?
In Business terms, needs are things that are necessary or essential to live, and wants are things that satisfy our pleasures, or something that you would like to buy or own, but is not a necessity to own (no need). Goals (or objectives) are aims or targets one works towards, only changing when conditions change or when one objective has been fulfilled. Simple in words, but hard on application.
Picture it like this: You walk into a supermarket, intending to buy just a few things. Maybe some ramen, water, a few veggies, some meats and toppings for a steamboat meal, things you intend to eat for your daily meals the following week. While strolling around, you notice a new chip flavour from your favourite brand, but you can’t resist trying it… so you decide to get it. Going to the ramen section, you get your budget Indomie, but notice that your favourite flavour of Buldak noodles are on a discount, and you get those too. In the end, you exit the store with double the things you intended to buy, spending double or triple the amount you intended to spend.
In the scenario, your goal was to buy groceries for the upcoming week. You needed only a few things such as water, vegetables, meat, etc., things that were a necessity. At the same time, you also bought what you wanted. Some chips, Buldak ramyeon, things you wanted to indulge in.
Think about it: How many times did we intend to get some things, only to come out with a lot more than we intended? That’s how marketing these days trick us, but there are some ways around it.
Why does it matter?
Deciding whether to spend on just the necessities or to “splurge” a bit affects how much we allocate in our budgets, or how we spend our budgets. Setting budgets may help control your spending, but eventually it will turn into “Do I buy item A now, or buy Item B first, because I can always buy Item A later?” Scenario, turning what used to be something to control our spending, into an “opportunity cost” scenario, where a (second-best) option is given up to get something else that’s better.
The ability to distinguish what we want, what we need, and what we aim to do (which can incorporate either one or both of what we need or want) can help us know or identify when to satisfy them, while also allowing us to properly allocate our resources when we budget, allowing us to make smarter choices and spend smarter.
How do we decide what matters most?
Logically, satisfying one’s needs matters more than satisfying one’s wants. On top of all that, it is important to fulfil set goals, but its importance depends on its contents (Is it based on what we have to do or what we want to do?).
Before your next shopping spree, ask yourself: “Do I need it?” Is it a limited-time offer, a daily necessity, or something you can pass on now and get later? Prioritize the things you need first, and if you have some extra cash you’re willing to spend, then maybe you could get some of your wants. Write and categorize them on a to-do list so you don’t lose track of your wants or needs.
Besides a regular to-do list, you could also use the Eisenhower Matrix; a two-by-two grid organizing tasks by urgency and importance. While it’s usually used for time management, it can also help identify spending patterns to help visualise how you spend your money and how to effectively manage your finances to possibly achieve short or long term (financial) goals. It not only highlights the things to be prioritised when spending (needs), but also helps divide the wants to figure out which ones are worth spending on or which ones need to be eliminated altogether.
The example above shows how a typical student expenses would fit into each quadrant. A good budget would prioritise the DO and SCHEDULE quadrants first. This makes it easier for the student to see the urgency and importance of certain items, but where each item is placed is totally dependent on the person’s needs or goals.
Having all three at the same time isn’t impossible.
By budgeting your expenses and identifying what is important and when to get them, not only are you controlling your spending, you are also effectively saving your expenses for when you might possibly need them, not just to satisfy wants, but also to save up for events such as buying a birthday present or new clothes for a festival.
Similar to a “cheat day” when people go on a diet, where they can eat to their hearts’ desire, by saving up your expenses from budgeting, you can also have a “splurge day” where you are free to spend or buy whatever you want with the money you saved.
By combining multiple note-taking methods such as the aforementioned Eisenhower Matrix and to-do lists, one can effectively manage their spending patterns by seeing what to spend on first and how important they are, while also saving for the wants you still aim to have in the future.
At the end of the day, how we spend or save the Monet we have is our own choice and responsibility. By planning and budgeting based on what we need, want, and aim for, we can reach a deeper sense of financial satisfaction than ever before.
The next time you see something that catches your eye, ask yourself: “Is this what I truly need, or is this just something I want right now?”
