Figuring out the wants vs. needs dilemma

Whenever we seek financial advice on how to manage our money, we’re often told to differentiate our needs from our wants. While this makes sense, it isn’t exactly the easiest thing to do.

It’s not about our wants or needs

Everything we decide to spend on is a need, whether it’s a product that fulfills our physical needs like food, or experience that will help us reach our personal goals. So we can’t really say that the best way to manage our money is by distinguishing what we want from what we need. It’s all about consciously identifying our priorities.

According to research, we, as consumers, don’t really think about the long-term consequences of spending, which is why priority-setting for the future isn’t something set in our behavior^[1]. We tend not to look in terms of our “future selves” and instead go for what we want and need at present.

Part of getting our priorities straight is recognizing that our resources are limited. When we do that, we can figure out a plan on how to maximize and better allocate what we have to fit our priorities, not just for the present but also for the future.

With a clearer sense of what our priorities are, we can fulfill our motives so that we can maintain our desired way of living and achieve personal growth.

We must remember that if we want to live more financially stable lives, there are products that we can explore like insurance that can help us invest and increase our income for a financially stable future.

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References:       

• Consumer Behavior: Building Marketing Strategy 9th Edition. McGraw-Hill. New York. https://www.sciencedaily.com/releases/2015/03/150331175918.htm