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Do you NEED it or WANT it?
What's the difference between a need and want? A "need" is something you cannot live without - a necessity. Food, clothing, shelter and medical care are basic needs. A "want" is something that you desire but isn't necessary to live. A want is a "nice to have" item or a luxury, such as designer clothing, a vacation home, or a sport utility vehicle. A need may be a pair of shoes, but a want is the $150 pair advertised by a famous athlete.
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Needs |
Wants |
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Breakfast, lunch and dinner! |
Soy Latte each morning |
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Housing |
3 bedroom condo |
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New winter coat |
New iPod |
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Daily transportation to work |
Summer vacation to Europe |
When you can control your spending on life's wants, you'll have more money available to save for what you need in the future. Start by making a list of all your needs and wants. Try to be brutally honest about which category they fall into. Then, review the items on your want list. Decide which are "high-priority" wants, and which you can truly live without. Then, try to create a balance between your needs and wants. What are you willing to give up? Can you compromise? For example, can you give up your morning coffee stop (or make coffee at home) in order to save for the spring break trip you want to take?
Take the Quiz-
40% of students are likely to buy a pair of jeans (or something similar) they really want even if they do not have the money to pay for it.
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Total consumer debt topped $2 trillion for the first time in 2003.
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Research has shown that as little as 10 hours of personal financial education positively affects students spending and savings habits.
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40% of Americans say they live beyond their means.
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50.8% of college-age adults agree with this statement: "I have experienced repeated, unsuccessful attempts to control, cut back or stop excessive money use."
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Teens surveyed by Teenage Research Unlimited reported spending 98% of their money, rather than saving it.
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One out of three households reported using credit cards to cover basic living expenses, on average, for four of the past 12 months.
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20% of graduating college students have $10,000 or more in non-school related credit card debt.
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The average household with debt carries approximately $10,000 to $12,000 in total revolving debt and has 9 credit cards.
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The US has recently seen an over 50% increase in bankruptcies among people under age 25 (fastest growing age range for bankruptcies)
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Half of all Americans are living paycheck to paycheck.