JagInsights › Glossary › Needs and wants
What is the difference between a need and a want?
A need is a bill you cannot drop without a serious consequence. A want is everything else, including upgrades of a real need.
A need is a cost that keeps the household housed, fed, insured, and able to work. A want is spending you could cancel. The grocery bill is a need. The brand upgrade inside that bill is often a want.
Worked example
A basic phone plan at $40 is a need if you need the phone for work. The $90 plan with a new phone on installment is $40 of need and $50 of want. Rent is a need. A more expensive apartment than the one that would do is a need plus a want, and only the extra is the want.
Why it matters
Budgets fail when every habit is labeled a need. The labels are how you find the money.
Questions people ask
Is a car a need?
The transportation that gets you to work is a need. A particular car payment may be larger than that need.
Are groceries all needs?
Food is a need. Restaurants and delivery are usually wants. The line is the meal you would still buy if money were tight.
Who decides?
You do, for your household. A published split cannot see your commute.
Educational information only. JagInsights is not a financial adviser, broker, or lender. See the Terms and Privacy Policy.