Need vs Want - know the difference
Let's look at need vs want. A key part of successful personal finance is to know the difference between something we need, an essential purchase; and, something we want, a discretionary purchase. We tend to get confused about the two.
Often what we think we need is simply something we want, disguised in a cloak of urgency. The advertising folks are great at letting us know what is available and making it look highly desirable.
We are the ones that dress the item up in a sense of urgency.
I have a little "need vs want" story to tell you that I think illustrates where we go astray when it comes to being happy and satisfied, having sufficient financial resources, and generally being financially realistic with ourselves.
It's not my intention to be critical of anyone, but merely to show: 1) how words affect our beliefs and actions; 2) how we learn things; 3) how we convince ourselves (and try to convince others) of things that aren't necessarily true; and, 4) how all of this begins very early in our lives.
A friend of mine came over to visit one weekend, and she brought her young exuberant son. He's quite a sharp kid.
Soon after he entered my home, he found his way to the pantry in the kitchen and ran out of there holding this large jar of applesauce over his head. His mother was not happy about him running with a large and heavy glass jar, but I was impressed with how easily he found exactly what interested him in the pantry.
Referring to the applesauce, he said something like "let's have this mommy." She told him "no" and he immediately responded with "But I need this."
Being a need vs want aficionado, I immediately latched onto his choice of words and joined in with "You don't need that, you want that."
With that remark, his mother seemed to snap to attention and realize that indeed his argument of need was really an expression of want. Joining in as a member of the recently formed need vs want club, she said "He's right, you don't need this, you just want it."
Her "snap to attention" made it clear to me that she hadn't been distinguishing between need vs want herself, because she didn't recognize at first that the claim her son was making was anything different than him saying "I want this."
As I recall, we watched this pint size politician devour a good helping of the stuff with great joy. I smile today just thinking about how happy he was that he had what he really wanted.
This little story is really a study in need vs want. He wanted the applesauce but described it as a need. A child of his age might not know exactly the difference between the two, but he certainly chose to articulate his desires using the word "need."
For me, this story shows several things. In no particular order, here they are:
- We learn even as children how to embellish the truth to persuade people.
- Perhaps persuading people with rationalizations (a form of embellished truth) comes as part of our human nature, but I think we learn most of this from the "significant others" in our lives. Perhaps you know of people who always need money for what appears to be very unnecessary things.
- The words we use influence what we believe, and what we believe influences what we say and do. The Nazi regime taught us that in spades.
So, is it possible that:
- The words others use influence how we view the world (our beliefs) and influence what we say and do (acting on our beliefs)?
- Failure to stay on guard will have many of us rationalizing our actions because we've disguised it as a need instead of seeing it as a want?
- Years of failing to think and express ourselves carefully can lead us into misrepresenting (to ourselves and others) our desires as needs?
- Those that easily fool themselves are also easily fooled by others?
I think the answer to all the above is a great big "YES."
As individuals focused on frugal living, it seems that we should be teaching ourselves and our children that a "need" isn't just an intense "desire," but something more akin to a "requirement" in our lives.
We should also recognize that when we obscure words in our language, we obscure the thoughts and concepts that those words represent. When we obscure those thoughts and concepts, it can't help but affect our beliefs and our actions that are based on those thoughts.
So, the "take away" from this example and discussion is simply that we need to carefully assess in realistic terms the whole idea of need vs want, especially when it comes to large purchases and recurring expenditures, as these are the "big chunks" when it comes to our cost of living.
I encourage you to be one that understands the difference between need vs want. I encourage you to resist talking yourself into something that's unwise or unnecessary until its clear that you have excess financial resources to throw around.
Done with Need vs Want, back to Basic Financial Planning