During this festive season, many of us indulge in shopping to “spruce” up our lives. Buying the luxurious Louis Vuitton handbag, a luxurious watch or the latest gadget are some ways of how people enhance their lives. However, let’s take a step back and decide if we really need those things. Is the latest watch a “want” or a “need”? What will happen if we did not buy that watch? Will our lives be worst off?
A want is something that is good to have. If you do not have it, it doesn’t make you worst off. A need is something that you have to have. If you do not have it, it might make you worst off. Examples of wants include a new watch even if you already have a working one, the latest smartphone, a car (yes, this is a want for most people) and many more. Even your daily fix of Starbucks coffee is a want. Examples of needs are the basic human needs like a shelter over your head, water, food, basic health care and hygiene products and clothes (not those fancy type but functional ones).
I mentioned car in the list of wants. In Singapore, with almost all the locations well-connected through public transport, a car can be a superfluous purchase. I think a taxi ride to all locations might cost lesser than servicing the car loan, paying for petrol, parking, etc. However, for those in the delivery business, it might be a need. Taking public transport for them might be a hassle as they need to delivery food or goods.
Once we know the difference between a want and a need, we have to distinguish if the item we long for is a want or a need. By doing so, we can budget our money properly and channel them into things that will provide us for the long-term. An example would be instead of buying the latest expensive watch that will set you back by a thousand grand, you can save up the money and once you have accumulated enough from other wants that you had chosen not to purchase, you can invest the money in a fundamentally strong stock. $5000 compounded for five years at 10% per annum gives u a cool $8000 at the end of five years. Isn’t that more enticing than buying those unwanted wants that will only give you satisfaction for a few weeks, or months at the most?
For myself, before I purchase anything, I distinguish if the purchase is a want or a need. Just today, I wanted to buy a new soccer boots and a vintage Manchester United jersey. After much thought, I decided not to buy them as I do not need them but they are just good to have.
Having said that, I do not mean we should not enjoy the finer things in life. It is alright to buy something that is a want once in a while to reward ourselves. It just should not become the norm and cloud our judgement, making us think that something that is actually a want is a need. In extreme cases, it can put us in a spiraling debt. Making us buy more and more on credit those things we do not need.
In conclusion, before purchasing the latest gadget or anything for the matter, we should identify if the purchase is a want or a need. Remember, a want is something that is nice to have. If you do not have it, it doesn’t make you worst off. A need is something that you have to have. If you do not have it, it might make you worst off. There should always always be a balance between our wants and needs. We can indulge in wants once in a while but we should make sure that we do not over-indulge in them!