Most of us don’t know the difference between our wants and our needs, so the tendency is we tend to live beyond our means. We sometimes feel the urge to buy something we think we need and most often than not pressure from family or friends or even the society tells us to follow our urges. And usually the realization comes too late when we only want and not really need what we already bought and spent for.
The basic examples of needs are clothing, house we live in, and food. These are man’s basic requirements in order for us to live. We need food for energy supplied in our body so that we can work or study effectively. We need a place to sleep in and we need clothes to wear at home, in the office or in school. Other possible basic needs are education, health protection, life insurance, transportation and other forms of leisure and entertainment for life balance. Living without these needs makes life more difficult and not worth living. So many people all over the world are living without these basic needs.
Below are the most basic needs that will help us live comfortably.
Food
Simple, nutritious food cooked at home is a need. Fancier food, usually cooked in a restaurant, is really a want. There are cases in which it is cheaper to buy food rather than cook, especially if you live on your own. The secret is to choose which option will give you nutritious food at the lowest cost.
Clothing
You need clothes that are clean, neat and are suited for your daily activities. You do not need expensive designer clothes.
Housing and Utilities
A room or a house big enough for you and your family, with simple furniture, a basic stove, small TV set and a telephone or a simple cell phone are needs. It is okay to rent a house if that is all you can afford to day. It is still a need to own a simple house eventually. A big house, expensive furniture, a home entertainment system and a sophisticated cell phone are wants.
Transportation
Enough money to be able to go to work and return home is a need. Owning a bicycle, a motorcycle or a car are usually wants. But there are cases in which it will cost you less to own a car than pay for a jeepney, a bus, a taxi or an MRT ride. When this happens, then the vehicle is a need. It is all right to buy it if you can afford it.
Education/Insurance
Education, health insurance and life insurance, especially if you have a family dependent on you, are needs. Higher education and better insurance coverage may fall into the wants category, depending on your status in life. If you wish to achieve more in your profession but cannot afford to enroll in a prestigious school, then you have the option to take short courses. In a very real sense, choosing what course to take and what school to get into is an investment decision. Quality education is not necessarily expensive. The cost of education must be weighed against what you stand to earn out of that investment.
When you acquire insurance, make sure the plan suits your objective and is consistent with your capacity to pay.
Leisure/Travel/Parties
We need a simple recreation to balance our life and help us copy with stress. There are many things we can do for free to keep our minds off our work and our problems. We can go to free public concerts or borrow books, magazines or newspapers and read them for leisure and for education. Many offices allow surfing the internet before and after office hours. You can arrange a gathering with friends by asking them to bring food for sharing, or take your bike to the park to catch the fresh morning breeze. It becomes a want if you start spending for a leisure activity.
Travel and big parties are only for those who already have passive income to spend. You should never use your active income to pay for a vacation trip or for holding a big party.
In the end, always remember that active income can buy only your needs. Passive income can buy both your needs and your wants. Never use your active income to buy your wants.
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