By: Jordyn Kohn
I remember getting my first job in undergrad and finally becoming a more financially independent person. It was a very great feeling knowing that I could support my weekly finances such as groceries, apartment utilities, and other essential things. With the freedom of spending my own hard-earned money, I also was now able to fund various other things that were maybe not as essential, such as grabbing a coffee a few times a week, a new book, or even a weekend trip with friends. While I enjoyed the extra flow of money into my bank account every two weeks, I had to quickly learn the importance of differentiating a “want” from a “need”.
Throughout my years in undergrad, I continued working to support myself through most of my expenses. I realized that as I was receiving these biweekly paychecks, I was not paying enough attention as to where my money was going. What percentage of my paycheck was going to groceries? Utilities? Weekly coffee? I sat down and finally organized my finances and laid out a realistic budget for myself. I was honestly shocked to see just how much money was being unintentionally allocated to “wants” and not “needs”. It was time to reevaluate my priorities and differentiate what in my life was a “want” and what was a “need”.
This was definitely a difficult task as a young undergrad student who just got introduced to the concept of personal finances. I struggled with creating boundaries for myself and defining what I spent my money on. There were many times where I would find myself attempting to justify buying three coffees a week and labeling that as a “need”, because the caffeine addiction was real (and still is). After going over all my payments, both necessary and unnecessary, I was able to easily visualize where my money was going, and how much I was allocating to certain aspects of my life. This was no easy feat, and it was definitely a trial-and-error situation, but I came out of this experience with a much better understanding of where I should be spending the money I make.
Here are some tips that I can now share about differentiating a “want” from a “need”:
- If it’s something that is necessary for you to live a healthy life, it’s a need.
- If it’s something that you are choosing to buy but can comfortably live without, it’s a want.
- Ask yourself if an expense will make you happier or healthier in the long term.
- Don’t try and convince yourself that a want is actually a need, if it’s not a necessity, it’s a want!
- Control your impulse spending and stay mindful when you’re shopping.
- Don’t be afraid to reach out for help, whether it be a family member, friend, or even an online resource such as CashCourse!