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Quote

"Advertising has us chasing cars and clothes, working jobs we hate, just so we can buy stuff we don't need." - Chuck Palahniuk, Fight Club

How To Determine Needs Vs Wants

Today we are going to cover three questions that will correctly identify needs vs wants and likely save you thousands over the next year.

The problem is most people get these two categories confused, and end up extravagantly spending on "needs" that are actually wants. 

If you aren't careful, these "wants" can be extremely costly.

Let's get into it so you don't make this mistake.

Is This a Basic Need?

Very straightforward.

Food, shelter, clothing, utilities, and basic services.

Essentially these are items you need daily to live a comfortable life. If you woke up tomorrow and were missing one of these you would experience a significant level of discomfort.

Though there is a happy medium, even with basic needs.

Would I like to be living in a two-story beach house watching the sunrise every morning? Yes, but I'd also be completely broke from rent.

Could I retire right now if I chose to live in a shed for the the rest of my life? Probably so, but it's nice having A/C, running water, a stocked refrigerator, and wifi that lets you troll people on Twitter.

Basic needs aren't hard to pick out but find an affordable balance.

Will This Help Me In 1 Year?

If in one year the item or service is going to be irrelevant to you then it's probably not a need. For example, people buy the coolest piece of furniture they can find, just to lose that excitement 2 weeks later after spilling their morning coffee on it.

Not worth it.

Asking this question also helps with impulse purchases. If you still can't decide, wait 24-48 hours before buying. Often the "I have to have this" urge will fade away (I do this with fishing gear). 

Services or tools that save you time, education, training, and useful subscriptions are all items I would consider helpful and classify as a need.

Happier or Healthier?

Not everything in life is about how many commas are in your net worth.

That's where this question comes into play. Money spent to improve your health or happiness is almost always worth it in my opinion.

Be careful to not over associate joy with material items. This is an expensive mistake. Avoid being materialistic, but don't be afraid to get a little giddy over that new golf club you snagged on sale.

One personal example of this question is a gym membership. To some people, it wouldn't be classified as a necessity, but it will without a doubt make me healthier and also happier.

For that reason, I consider my gym membership a need.

Conclusion

These questions give you slack to classify items not required for survival as needs, without letting you go overboard on wants.

As with anything, these can be abused if you are not honest with yourself.

Next time you can't decide if something is a need or want think:

• Is this a basic need?

• Will this help me in 1 year?

• Am I getting happier or healthier?

After a few times, you will start to see where your dollar has the most benefit.

Till next time, Cade.

What I Liked This Week

The 2023 Market Crash (Do This Now) - YouTube video by Joseph Carlson covering his 6 step process for analyzing individual stocks.

Murphy's Law - Email by Ramp Capital on his painful experience building a home, along with lessons for future home buyers.

Meme Highlights

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Nothing in this email is intended to serve as financial advice. Do your own research. Thanks for reading, if you have any questions, comments, suggestions, etc. about the email send me a DM on twitter. See you soon!