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Life Hack: Deciding if Your Wants Are Needs

People who are good with money all have one thing in common; they can easily identify the difference between needs versus wants and choose needs consistently. Far too many of us spend our hard-earned money on things we want in the moment, and then wonder why we’re stuck living from paycheck to paycheck needing an auto loan just to get by. If you can train yourself to avoid the wants and stick with the needs, your paychecks will stretch out farther than you ever thought possible and your finances will build over time. Here are some tips on how to recognize the difference between needs and wants:

Time is Money

For starters, take a good look at how much of your time is taken up to earn your paycheck. Now, compare that time with the time you have off. Kind of makes you want to ask for a raise, doesn’t it? This thought alone may help you realize just how valuable your money is to you. You’ll find that saving your money for things you need is much easier when you think about the time you’ve invested to get that money in the first place.

Do it Yourself

A lot of the services you pay for could likely be done yourself. Take meals for example. How many times do you go out to eat versus dining in? How much of your money is spent at restaurants? Imagine if you could stick to making easy and affordable meals at home and what that would mean for your finances. You’d save a lot of money and chances are, you’d be eating healthier.

Simplify Your Life

By ridding yourself of all the clutter in your car, office and home, you can easily gain a clearer perspective on how to live with less. Just because you own a lot of stuff, doesn’t mean you need all of it. Consider going through your closet and clearing out all the junk you never use and sell it online or donate it. After removing all the clutter, you’ll find that you never needed any of it in the first place, encouraging you to seek less and live within your financial means.

Pretend You’re Downsizing

Have you ever considered what it would be like to have to move into a smaller home? Would you be able to do it with all the stuff you have now? If you own a lot of stuff, then moving into a place that’s half the size of the one you’re in now could prove to be more than challenging. Chances are, you’d have to pay to put all that extra stuff in storage or just let it go entirely. But you’ll soon find out that it’s actually easier to live with less. All that extra stuff is stuff you never really needed in the first place. It was just taking up space, nothing more.

So now when you sit down to think about what your wants are versus what your needs are, you should have a pretty clear picture of where the threshold lies. When it’s time to spend again, make sure it’s on things you actually need that will improve your life rather than take up space in it.