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Wants vs. Needs: A Teen's Guide to Smart Spending

Have you ever begged your parents for the latest video game or that cool new outfit, even though you already have plenty of clothes and games at home? We've all been there! The truth is, there's a big difference between the things we want and the things we need. Understanding this difference is key to being a smart spender, especially when you're a teen just starting to manage your own money.

In this article, we'll explore the world of wants and needs, and give you some helpful tips on how to tell them apart. You'll learn what qualifies as a "want" versus a "need," and how to create a simple budget that will help you save money and spend it wisely. By the end, you'll be a pro at separating the things you really need from the things you just really, really want!

So, let's dive in and start learning the difference between wants and needs - and how you can become a super savvy teen spender!

What Are Wants?

Fun things we like

Wants are the things we really want, but don't necessarily need. They're the fun, exciting purchases that make us happy, like the latest video game, a cool new outfit, or that delicious ice cream sundae. Wants are the things we desire, but aren't essential for our survival or well-being.

Think about it - do you really need the newest smartphone or that trendy pair of sneakers? Probably not, but they sure are nice to have! Wants are the things that bring us joy and make our lives a little more enjoyable. They're the "extras" that we splurge on, even if they aren't absolutely necessary.

Examples of wants

Some common examples of wants include:

• Eating out at a fancy restaurant
• Going to the movies with friends
• Buying the latest video game console
• Upgrading to a newer, more expensive smartphone
• Purchasing the latest fashion trends
• Treating yourself to an expensive coffee or dessert

These are all things that we may really want, but don't necessarily need to survive or be healthy and happy. They're the "extras" in life that we sometimes splurge on, even if they aren't essential.

Wants are different from needs, which are the things we absolutely must have to live, like food, water, shelter, and clothing. Needs are the basic essentials, while wants are the fun, non-essential things we desire. Understanding the difference between wants and needs is an important part of smart spending and budgeting, especially for teens who are just starting to manage their own money.

What Are Needs?

Things we can't live without

When it comes to spending money, it's important to understand the difference between wants and needs. Needs are the things we absolutely must have to survive and be healthy. These are the essentials that we can't live without, like food, water, shelter, and clothing. Needs are the basic requirements for life.

Examples of needs

Let's look at some examples of needs. Food is a need because we have to eat to get the nutrients our bodies require. Water is a need because we have to drink to stay hydrated. Shelter, like a house or apartment, is a need because we need a safe place to live and protect ourselves from the elements. And clothing is a need because we require it to stay warm, dry, and covered.

These are all examples of needs - the things we must have to live a healthy, comfortable life. Needs are not the same as wants, which are the things we'd like to have but don't necessarily need to survive. Wants are more like luxuries or extras, like the latest smartphone, a big-screen TV, or designer clothes.

It's important to understand the difference between needs and wants when you're budgeting your money and making spending decisions. Focusing on your needs first and being smart about your wants is the key to financial responsibility and saving money.

Telling Wants and Needs Apart

Ask yourself questions

Figuring out the difference between wants and needs can be tricky, but it's an important skill to have, especially when it comes to smart spending. The first step is to ask yourself some questions. Is this something I absolutely have to have, or is it just something I really want? Will this purchase help me live and function day-to-day, or is it more of a luxury?

For example, food, shelter, and clothing are all needs - things you require to survive and be healthy. But a new pair of shoes or the latest video game console? Those are more likely wants. They might make you happy, but you can live without them.

The 'wait and see' trick

Another helpful trick is to wait before making a purchase, especially for bigger ticket items. If you still feel like you really need that new gadget or outfit after a few days, then it might be worth considering. But if the urge fades, chances are it was more of a want than a need.

Separating wants from needs takes some practice, but it's an important skill that will help you make smart money decisions, whether you're a teen or an adult. The next time you're tempted to spend, ask yourself - is this a want or a need? It might just save you some cash in the long run.

Smart Spending Tips

Save before you spend

Do you ever feel like your money just disappears? You get your allowance or paycheck, and before you know it, it's all gone! That's where saving money comes in. It's important to set aside some of your money before you start spending it. This way, you'll always have a little extra cash on hand for the things you really want or need.

How much should you save? A good rule of thumb is to try to save at least 10% of your income. That might sound like a lot, but even just a few dollars a week can really add up over time. You can start small and gradually increase the amount you save as you get more comfortable with it.

Where should you keep your savings? A piggy bank or a jar at home is a great way to start. But as you save more, you might want to open a savings account at a bank or credit union. That way, your money will be safe and you might even earn a little bit of interest on it.

Make a simple budget

Another important step in smart spending is to create a budget. A budget is a plan for how you're going to spend your money. It might sound complicated, but it's actually pretty simple.

Start by making a list of all the things you need to spend money on, like food, transportation, and school supplies. These are your needs. Then, make a list of the things you want, like new clothes, video games, or going out with friends. These are your wants.

Next, figure out how much money you have coming in each month, whether it's from an allowance, a part-time job, or other sources. Then, divide that money up between your needs and your wants. Make sure to prioritize your needs first, and then you can spend what's left on your wants.

Creating a budget might take a little bit of work, but it's worth it. It will help you make sure you have enough money for the things you really need, and it will also help you avoid overspending on the things you just want.

Remember, being smart with your money doesn't mean you can't have any fun. It just means being a little more thoughtful about how you spend it. With a little bit of planning and saving, you can have the best of both worlds!

Putting It All Together: Mastering the Wants vs. Needs Balance

Now that you understand the difference between wants and needs, you're well on your way to becoming a smart spender! By focusing on the essentials (your needs) and being more selective with the extras (your wants), you can learn to manage your money wisely and avoid overspending.

Remember, needs are the things you absolutely must have to live a healthy, comfortable life, like food, water, shelter, and clothing. Wants, on the other hand, are the fun, non-essential things that you desire, like the latest gadgets, trendy outfits, or going out for ice cream.

The key is to prioritize your needs first and then be thoughtful about your wants. Ask yourself if a purchase is truly necessary or if it's just something you really, really want. Try the "wait and see" trick - if the urge to buy something fades after a few days, it was probably more of a want than a need.

Creating a simple budget can also help you strike the right balance between your needs and wants. Set aside money for the essentials, then decide how much you can reasonably spend on the things you desire. With a little practice, you'll become a pro at separating wants from needs and making smart spending decisions.

Remember, being financially responsible doesn't mean you can't have any fun. It just means being a little more thoughtful about how you spend your money. By mastering the wants vs. needs balance, you'll be well on your way to a lifetime of smart spending and financial success!