Lago Vista Independent School District (LVISD)


Saving, Investing, and Personal Finance – Wants Vs. Needs

Are you unable to save? Are you sabotaging your own financial future? Do you even know what you are missing? Gaining that knowledge can help you put your life under your control, but it will take time and patience. It all starts with understanding your fate is up to you. This is the one of a series of articles for those new to saving, investing, and personal finance.

If you really want to improve your financial situation you only have two choices.

You can increase your income to provide more take home pay.

Or, you can control your expenses to live within your income.

There is something fundamental about these two choices. Do you see it?

The answer is that no matter which choice you make, it is really the same balance.

No matter how much your income is and expenses are, the same equation applies to everyone. All of us keep what is left over after subtracting expenses from income.

If you're living paycheck to paycheck, it will obviously be harder for you than someone who has some leeway in their finances. But the same math is applies to everyone. For this article, we'll focus on wants and needs.

Many people confuse wants and needs. This confusion cripples their ability to get ahead.

Wants are things you'd like to have. Needs are things you must have to survive; food, clothing shelter, transportation, a social network of friends and family.

You have a choice, you can decide to make others rich through your spending, or you can make yourself rich through saving and investing.

One way to begin taking control of your own future is by making a written list that sorts your expenses into wants and needs.

It is important to be strict about labeling wants as wants. Remember, no one is forcing you to cut anything. No one needs to see your list but you. If you label a want as a need you are only undermining your own analysis.

Being strict about listing wants will add perspective and lend flexibility to the list. If you won't die without it, or if you won't be unable to support yourself and your family without it, then it is a want, it is not a need.

Once an accurate list is formed, you'll begin to have more control over your own life. You are the only one who can decide what changes, if any, are to be made. The important thing is you'll be making conscious decisions about your life from the instant you begin the list.

You may not wish to make any changes. It is completely up to you. The question to ask is: if you are sabotaging your own financial future, or are unable to save, do you want to start taking control of your own life? Do you want to wait while letting wants continue to consume your finances?

If you do decide to improve your situation, getting rid of some wants will be hard. Think about how, over time, you can have money in the bank. Think about how, over time, you can have some money invested to grow on your behalf. Saving, investing, and personal finance means more freedom for you, and doing a good job of it makes it less likely you'll be at the mercy of others. Isn't that worth considering subtracting some wants?

Separating wants from needs is one of many steps in getting to a better point in financial life. It all starts with understanding your fate is up to you.


Individual Initiative is not an investment service. The information provided is intended to assist you by providing one of many sets of ideas about savings, investing, and personal finance. You should consult many resources to gather many ideas, then use only the ones that you believe will work best for your specific situation. This website contains a comment area. Comments made are those of the contributor and may not reflect the views of Individual Initiative. All investments include risk, including loss of principal. You should be certain you understand both the risks and benefits of any investment or investment strategy before investing.