What's the difference between your wants and your needs?

[Retired To Win]

Here's a direct quote from Arebelspy's MMM journal, with emphasis added:

"We've hit our financial goals, and now have enough.  We don't worry about money, and we don't budget, we just buy whatever we want.  We just want very little."

One way that I interpret this quote is that, for Arebelspy, values = needs = wants.  Which probably explains why he often razzes me about the differentiation I make between baseline living expenses and discretionary spending.

I admit that I am still thinking this through and developing my own conclusions about it.  In the meantime, I'd love to get some comparative input.

How do you view the difference, if any, between wants and needs in your financial approach right now?

[dandarc]

I've got our budget sectioned by "cut-ability".  In an emergency scenario, things like travel and such would get cut first, so I suppose those are more 'wants' than 'needs'.  I'd prefer to get to a simpler place with lower spending, but we're not in a place where 'we just want very little' at all, so differentiating will help us cope if / when the shit hits the fan.

[StockBeard]

Simple:
If my wife asks for it, it's a "need".
If I ask for it, it's a "want".
:)

Seriously though, I'd say every purchase that could lead to an argument between my wife and I is not worth fighting, and I would consider it a "need" for the family when my wife thinks we need it, even if I disagree on a personal level.

For example, some of the stuff we buy in groceries is stuff that I consider as nonessential. But she's the one doing the groceries, she's aware of our frugality goals, so she makes the conscious decision that we need it... I therefore consider it a need.

For most of the "wants", we discuss. When there is a need for a discussion, I know it's a "want".

Kind of a philosophical answer, I guess, but it's not the kind of stuff that can be categorized as in "groceries == needs", "entertainment == wants". This is not how things work :)

[BBub]

Here's how I think about wants vs needs, applied to our situation: Barebones, Enough, and Rich.

Barebones: is about $2k/mo (could be less) and includes basic items such as housing, maintenance, one vehicle, utilities and groceries.

Enough: our current standard of living which runs $3k/mo ex mortgage.  This adds some fancy meals, entertainment, a maid, travel, charity, etc to the above.

Rich: would be more than enough.. I'd consider us there if we had $4-5k per month in discretionary passive income.. Although, personally, the reason for pursuing money beyond the "enough" threshold would be more about safety margin than increased spending.

Obviously, my way of viewing of wants vs needs is just one little continuum along an infinite line of possibilities.  My barebones would be many other people's idea of rich, and my rich would be many other's barebones. But that's the way I look at wants vs needs, applied to my own situation.

[MLKnits]

I think this goes to the "live like you're rich" thing the blog talks about so much. Once you've really adapted to preferring to do things yourself; to finding luxury goods silly or off-putting; to wanting a smaller, sparser living environment--you don't need to watch the budget in the same way, because you will find yourself spending less regardless.

Personally, I'm not remotely there ;) though some of it is really creeping up quite well (I vastly prefer biking to work over driving, and I find restaurant prices more and more irritating, especially for alcohol). I can definitely see a future where my "budget" will be kept low purely because I don't want to buy most things, but at the moment, nah.

So for me, I do have to draw a sharp line between needs and wants, and I have to re-evaluate that line. For instance, I've been getting 95% of my books from the library (and I read a shit-ton of books), but then my ereader died. Is a new ereader a need? Probably not, but reading is pretty close to a need for me, and I spend hours a day doing it. So the actual ereader I bought was definitely a want, but it connects me to something I'd call a need--that was a tricky one for me.

To be fair, though, that can be broken down into the much more boring and endless "do you really need to buy chicken when lentils exist" or "do you really need to have more than one shirt" kinds of questions, which gets into a frankly less useful and less interesting or inspiring way of looking at it. Better, I think, to try to go back to the lens of: what about this is going to make me happy, and isn't it true that most of the time, the cheaper/free option will actually result in greater happiness? Not necessarily lentils > chicken, but learning to cook > never learning to cook, or learning to take care of nice clothes > burning through random ones carelessly.

And if you can learn to see it that way, you find yourself in Arebelspy's shoes, where your wants are very few and very affordable. That's the dream!

[AJ]

One way that I interpret this quote is that, for Arebelspy, values = needs = wants.

I don't think this is an accurate interpretation. Why not just take what he said at face value: that he has modest wants. Presumably, his "needs" are even more modest.

I consider needs anything I actually need to survive, which isn't much. Rice & beans, basic shelter from the elements, clean water. Everything else is something I "want".

[Erica/NWEdible]

About $40,000 a year. ;)

[Chris22]

To me this has always been a silly distinction.  You can distill NEEDS down to very little, anything above that is a want.

The pertinent question, in my opinion, is what are your TRUE wants.  I don't NEED to play golf, but I want to, to the point that I will structure my budget and financial planning to include it.  It's a priority to me.  Do I want a new cell phone?  Maybe in a kinda sorta nebulous way, but do I want it enough to include it in my financial plans?  No.  I don't NEED to own a home, but for various reasons I want to, so I spend a little more than rent might be to do so.

Etc etc etc.  It's not about needs vs. wants, it's about true wants versus bullshit unfulfilling fleeting wants.

[Retired To Win]

One way that I interpret this quote is that, for Arebelspy, values = needs = wants.

I don't think this is an accurate interpretation. Why not just take what he said at face value: that he has modest wants. Presumably, his "needs" are even more modest...

I am factoring in other comments he has made correlating his "values" to his spending, and how this makes his spending optimal -- meaning that he would neither add nor eliminate anything further.  So, no, his needs are not "even more modest," as far as I can tell.

(Of course, I could always be totally off the line... though I don't think so.)

[lostamonkey]

I would only need maybe $6-7K per year to survive if I really was desperate. I spend a lot more than that on luxuries. I don't need a one-bedroom apartment, to eat meat, to drive, to go on dates and hang out with friends but I choose to do all these things because they make me happy.

[Retired To Win]

I would only need maybe $6-7K per year to survive if I really was desperate. I spend a lot more than that on luxuries. I don't need a one-bedroom apartment, to eat meat, to drive, to go on dates and hang out with friends but I choose to do all these things because they make me happy.

Well, I wasn't trying to start a thread on how little anyone can get by on if they're, as you put it, really desperate.  Let's set desperation aside and talk about what we need to be satisfied (content?) versus what we want to be SATISFIED.  (For example, at my point in life, my housing satisfaction threshold is costlier than your one-bedroom apartment but not as "spendy" as the 3-bedroom house -- plus outbuildings -- on 2+ acres that I actually live in and which meets all my housing wants.)

[lostamonkey]

I would only need maybe $6-7K per year to survive if I really was desperate. I spend a lot more than that on luxuries. I don't need a one-bedroom apartment, to eat meat, to drive, to go on dates and hang out with friends but I choose to do all these things because they make me happy.

Well, I wasn't trying to start a thread on how little anyone can get by on if they're, as you put it, really desperate.  Let's set desperation aside and talk about what we need to be satisfied (content?) versus what we want to be SATISFIED.  (For example, at my point in life, my housing satisfaction threshold is costlier than your one-bedroom apartment but not as "spendy" as the 3-bedroom house -- plus outbuildings -- on 2+ acres that I actually live in and which meets all my housing wants.)

I define needs a little different from you. I consider my needs to be the bare minimum I need to survive, and everything else as wants.

[Janie]

I define needs a little different from you. I consider my needs to be the bare minimum I need to survive, and everything else as wants.

To the extent I think about it, that's the way I'd probably look at it.

what we need to be satisfied (content?) versus what we want to be SATISFIED.

A shift key.

[Norrie]

Yeah, I see needs as being basic human needs (food, clothing, shelter) with some other things that may be specific to your particular situation (in ours, medication and proximity to a hospital).

Wants are pretty much everything else. We've stripped our lives down to the basic needs in the past out of necessity, and I hope to never go there again, but I know that it's possible.

[The Pigeon]

what we need to be satisfied (content?) versus what we want to be SATISFIED.

A shift key.

Sometimes I wish this forum had a like button. The above ^^^ so funny!

[Merrie]

Wants are anything that isn't essential to physical survival and, I'd argue, to surviving in your job if you need your job. Nice clothes to wear to work might be a need if you need the income from your job in order to pay the rent, but a wider variety of clothes to choose from could be a want. Food is a need, fancier food is a want. A vehicle to drive to work is a need if you work too far away to bike; a fancy car is a want; a car is a want if you live 1 mile away from work and the grocery store and your spouse stays at home and your kid rides the bus to school. Then you get into gray areas of, is any car nicer than a rust bucket a want, or is it a better investment to buy a newer car because it'll need less maintenance and be more reliable and thus you're less likely to miss work due to the car breaking down/being in the shop, and stuff like that.

I get myself into hot water with this because whenever I try to cut back, I end up being ascetic to the point of causing myself angst and frustration and annoying my husband. I really try to find a happy medium. "Frugality without creativity is deprivation", quoth Amy Dacyczyn of Tightwad Gazette fame. Food is a need, slightly nicer food is a want, but if taking the extra effort to learn to cook good food at home and spending a bit more on ingredients keeps us happy with our food and not missing restaurants, I think it's money and time well spent.

[Retired To Win]

... Food is a need, fancier food is a want. A vehicle to drive to work is a need if you work too far away to bike; a fancy car is a want; a car is a want if you live 1 mile away from work and the grocery store and your spouse stays at home and your kid rides the bus to school...

+1... But do you have a minimum acceptable satisfaction threshold for a particular need?  Or would you consider a bowl of oatmeal 3 times (?) a day as meeting your food need?  Are you (and others) saying that you are willing to live with needs being met at the lowest possible level?

[Ricky]

I'm pretty sure you can boil everything in life down to a want. It's about recognizing which wants are more important.

[shelivesthedream]

... Food is a need, fancier food is a want. A vehicle to drive to work is a need if you work too far away to bike; a fancy car is a want; a car is a want if you live 1 mile away from work and the grocery store and your spouse stays at home and your kid rides the bus to school...

+1... But do you have a minimum acceptable satisfaction threshold for a particular need?  Or would you consider a bowl of oatmeal 3 times (?) a day as meeting your food need?  Are you (and others) saying that you are willing to live with needs being met at the lowest possible level?

http://en.m.wikipedia.org/wiki/Soylent_%28drink%29

[soccerluvof4]

... Food is a need, fancier food is a want. A vehicle to drive to work is a need if you work too far away to bike; a fancy car is a want; a car is a want if you live 1 mile away from work and the grocery store and your spouse stays at home and your kid rides the bus to school...

+1... But do you have a minimum acceptable satisfaction threshold for a particular need?  Or would you consider a bowl of oatmeal 3 times (?) a day as meeting your food need?  Are you (and others) saying that you are willing to live with needs being met at the lowest possible level?

http://en.m.wikipedia.org/wiki/Soylent_%28drink%29

Interesting but I would get bored eating/drinking the same thing over and over again. But i guess Dogs and cats don't seem to mind! lol


To me its simple. A need is simply what you have to have to survive and be a productive human in life. A want is the degree over and beyond the minimum way you can achieve that.

[G-dog]

One way that I interpret this quote is that, for Arebelspy, values = needs = wants.

I consider needs anything I actually need to survive, which isn't much. Rice & beans, basic shelter from the elements, clean water. Everything else is something I "want".

This is basically my view. I live beyond my minimal needs, but at least I realize I do it because I am indulging some wants.

My first thought was the difference between my needs and my wants is the difference between getting by financially and eventual financial freedom. I sacrifice (some) short terms wants for a longer term need/want.

[Insanity]

I am listening to the audio book version of the peaceful warrior and there was an interesting statement about bad habits. 

It focused around the intentional act and controlling it.  There is no real difference between wants and needs.  There is only having the intentional of doing something and accepting the consequences while taking other actions to compensate for those consequences such that is individual's  goal is not impacted.

I think that is the key.  It is not about want or need.  It is about being intentional with the decisions and ensure the action does not compromise the goal.

[Cougar]

 in my experience, if you give yourself enough time; you can usually discern between your want and need.

 for instance, my current couch and loveseat is over 10 years old, so as you can imagine it looks worn and the seat cushions have lost all stability. so, i looked at getting new ones, having new ones built and it was more than i wanted to spend; so i thought about what i really needed, a "new" look and better seat cushions and had it reupholstered for about $1,000 less than new.

 i did the same with the car, just got it a realy great detail, a performance tuning, some new springs and struts; and its fine and i dont have a car payment.(there are actually people doing cash out refi's on their car loans; ouch !; those people are going to be working until the day they die; mmm would be teaching them some african tribal language).

[kreyc]

It's complex. I distinguish by saying that a "need" is a need when it's a non-negotiable prerequisite for reaching a goal I have. If not, it's just a want that I call a "need" to make me weak. (Though this pushes the complexity toward setting meaningful goals, but I'm more comfortable with that.)

[Ynari]

There's this grey area between a "need" (as in, would not survive without it) and a "want" that does, indeed, depend on values. I usually refer to things in the dark-grey shade as needs, if they are on that side of the personal arbitrary line I drew from experience.

Surely, you need food, shelter, and a way to keep warm. Does this mean you only "need" a bunk in a room shared with 5 other people, rice, and a blanket? Does this mean a McMansion, $100 steaks, and designer clothing are purely "wants"?  What line is drawn, and how do you determine that?  What about psychological needs, like spending time with family and friends and having a lifestyle that prevents depression and anxiety from taking over?

Personally, I think this grey area is something you have to experience to figure out. Live in a tiny studio apartment for a year before deciding how much space you actually need. Try eating more cheaply until there you hit a limit of health or satisfaction. Live without (or with minimal) access to stores or services you are currently paying for to see if you really need them. Give yourself the challenge of living without. If you find your life has depreciated in quality, slowly add things that solve your problems that have now more clearly shown themselves.

Again, it's a case of "question everything". "Needs" defined in my way may change and be highly subjective, but I consider mental health to be very important and sometimes the little wants do matter. But you have to really know yourself to figure out the limits.

[Retired To Win]

... Surely, you need food, shelter, and a way to keep warm. Does this mean you only "need" a bunk in a room shared with 5 other people, rice, and a blanket? Does this mean a McMansion, $100 steaks, and designer clothing are purely "wants"?  What line is drawn, and how do you determine that?  What about psychological needs, like spending time with family and friends and having a lifestyle that prevents depression and anxiety from taking over?...

I am starting to think that what each of us subjectively needs is defined by what and how much we have to have before we are ready to FIRE.  If you are seriously intending to FIRE with your shelter being "a bunk in a room shared with 5 other people," then that's it for you.  But if you're not going to FIRE until you can fund and live in a 3-bedroom house, then that's what YOU need for shelter and there's no sense in talking about a bunk being all you really need -- because it is not.  (IMHO!)

[larmando]

... Surely, you need food, shelter, and a way to keep warm. Does this mean you only "need" a bunk in a room shared with 5 other people, rice, and a blanket? Does this mean a McMansion, $100 steaks, and designer clothing are purely "wants"?  What line is drawn, and how do you determine that?  What about psychological needs, like spending time with family and friends and having a lifestyle that prevents depression and anxiety from taking over?...

I am starting to think that what each of us subjectively needs is defined by what and how much we have to have before we are ready to FIRE.  If you are seriously intending to FIRE with your shelter being "a bunk in a room shared with 5 other people," then that's it for you.  But if you're not going to FIRE until you can fund and live in a 3-bedroom house, then that's what YOU need for shelter and there's no sense in talking about a bunk being all you really need -- because it is not.  (IMHO!)

No, the fact that one is waiting to FIRE until a want is satisfied doesn't make it a need, just a higher priority want for that person. What would they do if their investment lost 50% *and* they lost their job? Being able to adapt is key.

[alsoknownasDean]

It's a fundamental principle of economics that our wants are infinite. I don't think that Mustachians are entirely excluded from that.

Our raw needs can also be met with very little. Think someone who lives in a tent in the woods and survives by foraging. They're likely to be meeting their needs.

Of course we classify our wants (using price as part of the guide) and satisfy those which we believe are important enough to be worth the opportunity cost (be it the financial cost of the money or the time cost of working to afford the want).

If you earn $25 an hour and want an item valued at $500, is it worth 20 hours of work to obtain the item? Is it worth sacrificing forever the investment income that $500 would have otherwise earnt? Sometimes it is, and sometimes it isn't, it just depends on the item and how much you value it.

[Retired To Win]

... Surely, you need food, shelter, and a way to keep warm. Does this mean you only "need" a bunk in a room shared with 5 other people, rice, and a blanket? Does this mean a McMansion, $100 steaks, and designer clothing are purely "wants"?  What line is drawn, and how do you determine that?  What about psychological needs, like spending time with family and friends and having a lifestyle that prevents depression and anxiety from taking over?...

I am starting to think that what each of us subjectively needs is defined by what and how much we have to have before we are ready to FIRE.  If you are seriously intending to FIRE with your shelter being "a bunk in a room shared with 5 other people," then that's it for you.  But if you're not going to FIRE until you can fund and live in a 3-bedroom house, then that's what YOU need for shelter and there's no sense in talking about a bunk being all you really need -- because it is not.  (IMHO!)

No, the fact that one is waiting to FIRE until a want is satisfied doesn't make it a need, just a higher priority want for that person. What would they do if their investment lost 50% *and* they lost their job? Being able to adapt is key.

That is definitely NOT what I would do.  I would not "adapt" to (i.e. accept) my diminished circumstances.  I would roll with the punch, and seek and carry out whatever actions I could to recover those circumstances.  I would put up with the loss of my life satisfaction floor conditions as a temporary situation -- but I would not "adapt" to that loss.

[Retire-Canada]

That is definitely NOT what I would do.  I would not "adapt" to (i.e. accept) my diminished circumstances.  I would roll with the punch, and seek and carry out whatever actions I could to recover those circumstances.  I would put up with the loss of my life satisfaction floor conditions as a temporary situation -- but I would not "adapt" to that loss.

Adaptation is a process you can't fully control. If you spend a bunch of time in a situation you would have initially thought to be deprived it can become simply normal.

If the situation is easy to reverse you may not be in the new circumstance long enough to adapt, but if on the other hand it's something you can't change for months or years you likely will adapt.

[Retired To Win]

That is definitely NOT what I would do.  I would not "adapt" to (i.e. accept) my diminished circumstances.  I would roll with the punch, and seek and carry out whatever actions I could to recover those circumstances.  I would put up with the loss of my life satisfaction floor conditions as a temporary situation -- but I would not "adapt" to that loss.

Adaptation is a process you can't fully control. If you spend a bunch of time in a situation you would have initially thought to be deprived it can become simply normal.

If the situation is easy to reverse you may not be in the new circumstance long enough to adapt, but if on the other hand it's something you can't change for months or years you likely will adapt.

Well, you and I have different notions of what is meant by "adapt."  As one example, when I lived in places that had just too much winter for me -- even though I ended up being there for years -- I never accepted being there and finally got myself out.

I think your definition of "adapt" includes some measure of "acceptance" whereas my definition includes a measure of "grudging forbearance" instead.

[Jouer]

Let's consider a house (or apartment) for a couple, no kids.

Need: bedroom, bathroom, kitchen, living room
Want: walk-in closet in bedroom, ensuite bathroom with soaker tub, granite countertop in kitchen, large screen TV in living room


Or let's consider a vehicle.

Need: used car, any make or model
Want: but I enjoy driving so I want XX horsepower, handling, etc.


Certainly travel is a want. Golf is a want. One could argue exercise is a need (I would), but paying to play golf or hockey etc. is a want. Having a computer could be a need....but having a kick-ass video card for gaming is want.

Just because something is a "want" doesn't mean spending money on it is a waste.

[Kooper]

Hm, it seems to me that the difference between these two things is obvious. And I believe it's ok to have higher wants then our needs as they motivate us to develop.