When it comes to prioritizing your money and time, there is nothing more important than understanding what your wants and needs are.
In fact, I consider understanding your needs to be a core part of simple living. Trying to reduce what you need is one of the best ways to live more simply.
And trying to reduce what you want is a great way to remove desire and temptation in your life. The less you want, the more content you can be.
However, in our lives, there are certain to be things we need and want. That is part of living an interested and fulfilling life.
The Need vs Want Chart
When considering whether something is a “need” or a “want”, I think it’s best to view it as a spectrum of possible answers. There are few cases that something is 100% a need, or 100% want.
The chart above shows a simple view of this spectrum. You can have varying levels of wants, and needs. Broken into four quadrants, you have the following options:
High Want / Low Need – There may be some things in your life that you really want, but you have no need for. This might include reasonable things like hobbies or passion projects. But it can also include frivolous desires. Things in this category should be limited to priority items that truly bring you happiness in life.
High Want / High Need – There are likely a number of things that you both want and need. For most people, this is where items like food, housing, and clothing fall. Also, non-material things like having a healthy body, good relationships, and financial security are here too. But be careful not to over-justify a want as a need (ie. a large house, or lots of clothing).
Low Want / Low Need – The easy things to avoid are the low want and low need items or activities. If you don’t need something in your life, and you don’t want it, then don’t do it. It sounds simple, but I guarantee you still unintentionally buy or do things in this category from time to time!
Low Want / High Need – Then there are things that you don’t want to do, but have to do. Paying for expenses like insurance or taxes. Or having to do things like deal with renewing government documentation. This is an area where you should actively try to minimize cost and effort.