The relationship between needs and wants is a subject most of us are familiar with. The basic lessons behind it are taught early on in our school careers, so it might seem like a clear-cut and simple subject. However, an item’s status as a need or want is often not as black and white as it is when taught in grade school. With this in mind, it’s important to work towards understanding and evaluating the nuances between needs and wants in adult life. Doing so can go a long way towards saving money.
It often feels that the concept of needs and wants was developed specifically for college students. It’s a good concept for anyone to consider, and philosophically, it’s equally important for everyone to consider, regardless of income level. But financially, the more money one has, the more wants he or she can probably purchase without taking a dent in his or her bank account. As students pursuing higher education, we hope to someday make a higher income, but for now as college students, needs and wants can make a significant difference in the amount of money we have at the end of our semesters.
To review basic needs, they are generally things that we absolutely need to stay alive, such as food, water, shelter, and clothing, among other things. Other categories, such as entertainment, are wants as they are not actually needed to maintain survival. That is the simplest concept of needs and wants.
Needs and wants increase in complexity when you consider the type of thing you should buy to satisfy a need. Yes, water is a basic human need, and Fiji water can satisfy that need, but Fiji water is in no way a need. This is where saving money can really be saved; evaluating what’s necessary to satisfy a need and knowing whether or not you are straying beyond this concept can gradually lead to big savings.
So, separating needs from wants is still pretty simple, right? As you grow up, the line between needs and wants tend to blur, and that leads to the biggest reason why this concept is being revisited: college alone complicates the relationship between needs and wants.
Can just being well fed, warm, and having a roof under your head make you a successful college student? It certainly helps, but the answer is likely no, and since graduating college helps lead to a well-paying job that can cover all your needs as an independent, successfully completing your education could be considered a need. This need is less obvious and more complex than the more basic needs, but it can be considered one nonetheless.
So what might you need to pass classes and get good grades? Books for class tend to be vital, and in this day and age, a laptop seems essential to success. Those could be considered needs for doing well in college courses, but it’s important to not overspend on satisfying those needs. You reasonably need books and a laptop, but you can probably succeed off used, rather than brand new books, and you can probably get along fine with a cheaper and more basic laptop rather than, say, the new Macbook Air. This concept is still relatively simple, but when it becomes difficult to distinguish whether an item is a want or need, a helpful guide does exist.
The Hierarchy of Needs – created by Abraham Maslow – was intended for psychological purposes and is mainly used in psychology. However, its ranking of relevance for needs is also helpful for prioritizing what you need from what might be more of a want. The most basic human needs are represented at the bottom, with more abstract human needs represented at the top. The bottom two, or most basic needs on the pyramid, are physiological and safety, followed by love/belonging, then esteem, and then self-actualization at the tip.
This hierarchy does well as a guide because it shows which needs are most relevant to survival. Love and belonging are still obviously important, but often more wants, such as entertainment, are tapped into to reach that need as opposed to a need like safety. This is not to say you shouldn’t seek out the less basic needs. In my opinion, the pyramid should be looked at as more of a general guideline than a rigid formula. Treating it this way can eventually lead to a better ability to balance the nuances of needs and wants. However, regardless of what strategy you decide to use to separate needs from wants, it’s important to be thoughtful and deliberative when deciding what to buy. Doing so can make all the difference in what you save from semester to semester.