In a nutshell, needs are things that are essential for survival or basic well-being, like food, water and shelter. Wants are things that improve comfort or happiness but are not essential, like luxury items, entertainment and latest trends.

It’s surprising how quickly a want can transform into a need. For instance, seeing an advertisement for the latest smartwatch might initially spark the thought, “That’s awesome, but my current one works perfectly.” Yet, within a few days, that new smartwatch could end up on your wrist, leaving you wondering how it happened.

What to do about needs and wants

• Pause and reflect: When you feel the urge to buy something, ask yourself, “Do I really need this?” This helps distinguish between a fleeting desire and a genuine need.
• Evaluate your values: Consider what truly matters. Sometimes, happiness comes from appreciating what you already have. Reflect on whether the item aligns with your long-term goals and values.
• Delay gratification: Give yourself time before making a purchase. If the need persists after a few days, it might be worth considering. Often, the initial impulse fades, revealing it wasn’t necessary.
• Prioritise needs over wants: Focus on fulfilling essential needs first, like food, shelter, and healthcare. Once these are secured, you can think about indulging in wants, but with a clear understanding of their place in your life.

Understanding the difference between wants and needs is key to managing personal finances and achieving a balanced life. By reflecting and prioritising, you can make informed decisions that align with your values and financial goals.

This information is of a general nature and is not intended as personalised financial advice. RIVAL Wealth is a Financial Advice Provider (FAP) licenced by the Financial Markets Authority to provide financial advice. Our disclosure document is located at rivalwealth.co.nz or a written copy is available on request