I meet people all the time who can't tell the difference between what they need and what they want. In our consumption-crazed world, virtually everything has become a need and, with the ease of a credit card swipe, we can turn every need into a purchase.
Needs are the things we must have to keep body and soul together. You need a roof over your head, you need food in your belly, you need to get to and from work so you can make money. You also need to save for the future, get out of debt and make sure your butt is covered in case the caca hits the fan.
Wants are the things we really like. While we need a roof, we might want one over a spiffy kitchen with granite counters and stainless-steel appliances. While we need food, we may want the steak, twice-baked potatoes and garlic bread.
Are you one of the people who claim that they "need" a vacation? Do you need a full-out cable package? How about that smartphone? If you simply can't imagine your life without all the extras you've come to know and love, you've lost track of what a need really is.
Of course, never getting any of the good stuff is a bummer. Wants are fine. You shouldn't only satisfy your needs and leave all your wants to wilt from a lack of attention. I'm all for satisfying wants, but it's a matter of making sure your needs are dealt with first before taking care of your wants.
Find yourself scrambling to cover your bills? It may be that your wants got in the way of your needs. Spend more than a couple of days a month in overdraft? You may have a needs/wants problem. Are your credit-card or line-of-credit balances still going up? Your wants may be getting the better of you.
This week as you write in your spending journal -- and you are tracking what you're spending in your spending journal, aren't you? -- write a 'W' beside the things that are wants and an 'N' beside the things that are needs. If something you want stands in the way of paying for a need and you don't walk away, you're not really serious about fixing your money problems, so you should stop pretending.
Serious about your money? Then you'll make sure all your needs are covered before you venture into the want zone. You'll need a budget to do that!
Gail Vaz-Oxlade's latest book, Money Rules, is published by HarperCollins and will make you say, "Really? I didn't know that!"