Financial Wellness: Identifying our needs vs. wants

After a slow start finding his words, my toddler son has started talking like a mini grown-up, seemingly overnight.

“I need coffee, Mama,” 2-year-old Owen said the other morning as he emerged from his bedroom and joined me in the living room. I made him a cup of hot cocoa, or “Owen coffee” as it’s called in our house.

His groggy demand reminded me of his big sister, Eve, now 6. As a toddler, she neeeeded everything, too: apple juice, her music CDs on constant repeat, Elmo on YouTube.

The “need” verbiage is classic toddler language, understandable given their limited world view. In their minds, they do need whatever they’re requesting, like when Owen said, “I neeeeed ice cream” the next day.

I like to repeat these requests back to my children, using the word “want” instead. It’s one way I hope to instill the important distinction between the two early in life.

Identifying our needs from our wants – and prioritizing our resources accordingly – is a crucial step in maintaining a balanced budget. Because the odds are you’ll never have enough money to afford all your wants.

I was thrilled when Eve brought home a kindergarten worksheet this month about needs and wants. She’d circled all the true needs (food, clothing, shelter, family), and put an X through the wants (a TV, a bike). Concept mastered!

That’s something not all adults have achieved.

Most of us could stand to re-evaluate what we consider necessary in life. Odds are you’ll find a few luxuries masquerading in there.

It’s more than a pencil-and- paper exercise, though. It’s about attitude, including the words we use.

How often do you talk or think about the things you “need” to buy or own? How often are those things actually a “need” – something impossible to survive without – versus a mere want?

When we say that we “need” whatever new fashion or technology or experience has us drooling, we begin to confuse the two, subconsciously at least. We’re convincing ourselves that we are somehow deprived if we don’t procure that need/want.

If we feel deprived, we’re more likely to make poor financial decisions than when we approach purchases from a place of satisfaction and abundance.

A financial adviser once shared with me an illustration of how a want can spiral into a “need” in our minds, until we buy it. Pretty soon, another want catches our eye. It’s a cycle that’s often repeated futilely in search of happiness.

But when we find contentment in the realization that our base needs are fulfilled, the wants we are able to splurge on responsibly are pure gravy. It’s so satisfying to obtain something you want when you know you can truly afford it, thanks to proper planning and patience.

Achieving that mentality may require stepping back from our consumer-laden society. It definitely means not trying to keep up with the Joneses. It likely will take some reframing of your thoughts, as well as your words.

Language is powerful, from the mouths of babes to our inner voice.

Sherri Richards is a thrifty mom of two and Business Editor of The Forum. She writes a weekly personal finance column. Contact her at