Everything you buy sits somewhere between “I must have this” and “it would be nice”. Learning to tell the two apart is the first step to spending with purpose.
This article is the reading companion to the free Mondosol lesson Money Matters: Needs vs. Wants, part of the Money course. Read it, watch the videos, or press play and listen first, then practise in the lesson.
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In this article
Needs and wants in plain words
A need is something you must have to live safely, like food, shelter or medicine. A want is something nice to have that you can live without, like a new game.
The tricky part is that the same thing can be either. Shoes are a need. A fourth pair of limited-edition shoes is a want.
| Need | Want | |
|---|---|---|
| Test | You cannot skip it without real consequences | You can live without it |
| Examples | Food, a place to live, medicine, transport to work or school | Games, takeaway coffee, the newest phone, streaming extras |
| When money is short | Pay for it first | Wait, or skip it |
The key words
| Word | What it means |
|---|---|
| Priority | The thing you put first because it matters most right now |
| Trade-off | Giving up one thing so you can have another. Every choice has one |
| Impulse | A sudden urge to buy something without thinking it through |
| Essential | Absolutely necessary, you cannot skip it without real consequences |
| Luxury | An expensive extra that feels great but is not essential |
The grey zone
Many choices are not black and white. A phone may be a need if you use it to reach your family or for school. The newest, most expensive model is a want.
A helpful trick is to ask two questions: What happens if I do not buy this? and Is there a cheaper way to get the same result? If nothing serious happens, or a cheaper option works, you are probably looking at a want.
How to handle impulse buys
- Wait 24 hours. If you still want it tomorrow, it may be worth it.
- Write it on a list. Seeing wants on paper makes it easier to choose the best one.
- Check your priorities. Does it help a goal you care about, or does it pull you away from one?
- Count the trade-off. What will you give up to afford it?
Wants are not bad. A good plan simply makes room for a few of them after the needs are paid.
A simple example
Invented numbers, only to show the idea. Imagine you have 40 euros for the week.
| Item | Need or want | Cost (EUR) |
|---|---|---|
| Bus pass top-up | Need | 12 |
| Lunch ingredients | Need | 15 |
| Phone game bundle | Want | 9 |
| Saved for later | Choice | 4 |
The needs come first. What is left can go to a want, or into savings. Either is fine, as long as you chose it on purpose.
Watch: needs and wants
Two short videos explain needs and wants with everyday examples. They are explanations, not advice.
Video: “Needs and Wants Explained for Kids” by MoneyMoments, on YouTube.
Video: “Economics for Kids: Needs and Wants” by Teaching Without Frills, on YouTube.
Take it further
Reading is a good start. These options help you go from knowing to doing.
All courses, live coaching sessions and members-only events, with a 30-day money-back guarantee. See the plans
A live session on Google Meet to turn this topic into your own plan. Book a session
Frequently asked questions
What is the difference between a need and a want?
A need is something you must have to live safely, such as food, shelter and medicine. A want is something nice to have that you can live without.
Can something be both a need and a want?
Yes. A phone for school or work can be a need, while the newest model is a want. Ask what happens if you do not buy it.
Why do wants feel like needs?
Ads, friends and the feeling of a quick treat can make a want feel urgent. Waiting 24 hours helps the feeling pass.
Is it wrong to spend on wants?
No. A good plan leaves room for a few wants after your needs are paid.
How do I start separating needs from wants?
Write down what you spent last week and label each item. Your first budget can start from that list.
Keep learning
- Course: Money
- Lesson (practise it): Money Matters: Needs vs. Wants
- Read next: Set a Savings Goal and Borrowing and Debt
- Related: How to Start an Emergency Fund in 30 Days
Educational, not financial advice. The example numbers are invented, and this post contains no affiliate links. Mondosol is not a licensed financial adviser.
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