Needs: you hear a lot about them. Usually it’s in relief to wants, which are treated as frivolous whimsies by many of my fellow personal finance bloggers. I reject the notion that anyone in the developed world has to discern between a want and a need, and here’s why.
Allow me to introduce: Maslow’s Hierarchy of Needs!
We’re going to only touch on this briefly, since I had this pounded into my head in college*, and frankly, I’m sick to death of the subject. Here’s the gist of the idea: Everybody is trying to climb up the pyramid, and they have to move one level at a time. All lower needs must be satisfied before moving on to the next level of needs. I’m oversimplifying, but you get the idea.
So, what’s the point? I say that there’s no such thing as needs as defined by most PF bloggers. It’s all just a continuum of wants, with some wants more wanted than others.
I want dry shelter, clean water, ample food, sanitation, and so on very badly. If I’m thirsty, I’m willing to pay a steep price for water. There’s a temptation to call this a need. But think: how long have humans survived with meager and dirty water? Could you survive with substandard water? Sure! You’d just hate it, though, because you’d want better water. We all would.
What about food? People can subsist a long time on scraps, but nobody wants to. We want an ample, flavorful, healthy meal that satisfies. We want it to be served in a clean environment. We want to eat it in good company. We want, but we do not need.
So, what’s the point? The point is that if you are reading this, you aren’t prioritizing by “needs” and probably never have. You probably live nowhere near the level of poverty that would characterize “need.” You prioritize by wants. Now the challenge that remains is to prioritize them sensibly, then to fund them so they may be fulfilled.
Why does this matter? If you guessed “budgeting” you get a gold star! The simple fact is that budgeting is all about ranking your wants and then allocating your money to the things you want most. So figure out what you really want – but don’t call it a need.
* I had to sit through this in four classes: psychology, sociology, personal finance, and marketing. It ceases to be interesting the second time, becomes tedious the third time, and the fourth is nap time.