Mistaking Wants for Needs

Monday, 21 November 2011

by Louise Upton

Here's a definition of unhappiness: stress, anxiety, worry and guilt after overspending. Mistakenly deciding that a 'want' is a 'need' and then blowing the budget fits our definition perfectly.

So why do we get ourselves into this cycle of unhappiness so often? John Munder Ross, a US-based psychologist, theorises that we all have an unconscious desire to experience pain. In his book 'The Sadomasochism of Everyday Life' (Simon and Schuster), he says 'that from the boardroom to the bedroom we expose ourselves to familiar rituals of self-torture'. He believes we can break the cycle of unhappiness but it takes work.

Differentiating wants from needs

When it comes to overspending, differentiating between wants and needs is the key. Australian psychologist Dr Suzy Green of the Positive Psychologist Institute explains.

'A need is something that is essential to our survival. There are physical needs like food, water and shelter. There have also been psychological needs identified which include autonomy, competence and relatedness. A want is something that is not essential to our survival: a pair of Jimmy Choo shoes, a new plasma TV or a 5-star holiday.

'We often hear ourselves or friends saying, 'I really neeeeeed it!' You're best to ask yourself: 'do I need it or want it?' 'Is it essential to my well-being?' 'What might be the consequences of purchasing a 'want', particularly when needs such as being able to pay my rent are going to be jeopardised?''

When it comes to saving strategies, a need is a product or service that is required, necessary or obligated, such as food, basic work clothes, basic utilities.

On the other hand, a want is a product or service that is desired, but not required, necessary or obligated, such as restaurant meals, designer label clothes, pay TV.

Our needs should come first, but we don't always want what we need. As an example, as a sole trader you need to pay tax. You might not want to, but it is a basic necessity.

To help differentiate between needs and wants, ask yourself these questions:

1. What are the consequences if I buy the item?

2. What are the consequences if I don't buy the item?

3. Who else is impacted by the purchase?

4. Is there a better place to spend the money?