By Victoria Feng, Money Smarts and AKOM Editor
We’ve all probably been in a situation where we’ve been coveting something- like a necklace or a racecar. But then there’s the big question: do I really need it or do I want it? Most of us are taught about needs and wants early one, but sometimes it is not that simple-especially when it comes to the want category. It’s easy to get into the mentality that you need an item. More often than not, what you think is a “need”, is actually a “want”. First off, what are wants and needs? Needs are things that are essential to survival (e.g. oxygen, water, food, and shelter). A good rule of thumb is to spend money on what you need first, like the needs I described above. They should be of the highest priority. Have you ever felt that some wants are more important than others? I certainly have. So I devised a list that may be more useful than the simple need and want idea. However, this is not a one size fits all list for people who have different priorities than mine. This is what I spend my money on:
- Educational Tools – Since I was little, I have always loved learning. I used to go to the bookstore every week. Books were, and still are, an important part of my life. Reading has opened me up to so many worlds that I couldn’t have imagined otherwise. There are workbooks, apps, and textbooks that teach a variety of subjects.
- Gifts – I give presents during birthdays and holidays since I really believe in the importance of giving to others. As Christmas is rapidly approaching, it’s good if we can think more about giving than receiving. Of course, you can choose to give handmade items, which can also turn out great. In the December 2015 Money Smarts article, Editor-in-Chief Ryan Traynor wrote about several great budget-friendly and heartfelt ideas.
- Personal Wants – In this category, I’m going to put things I really want- not just anything I think of out of the blue. Regardless of how you structure your list, don’t buy something (especially goods or services that are more expensive) unless you are sure you want it.
- Savings – You may think, I have an extra $20, I’ll just buy some games with it. But before you go to the store, think if you really need it. Instead of just spending money because you have extra, put it in the bank and keep it there until your next purchase.
It isn’t always easy to not buy something, so I’ve been searching for ideas to help cope with these difficulties. Among the most useful ideas I found was adding all the things you want for a period of time. For this experiment, I searched “must needs school”. I clicked on the Seventeen link and it brought me to some back-to-school things. I added up every item on the slideshow- 23 items in all- and I was surprised at the cost: $357.12. These items are not exactly what I would have put for this month’s wish list for me personally, but I can definitely think of a few items right off the bat- and probably have during this month. The point of this is to add up all the things you want but didn’t buy, and then see how much money you saved.
Some people say that if it’s over $20, wait 6 months. Chances are, your love for that really cool thing will wear off in a few days. Going back to the theme of buying only needs and things that you are sure you want, please be careful with your purchases- especially expensive ones.
There are countless other methods to help you not waste money. I’ve only touched the tip of the iceberg. One of my favorite money philosophies is to not buy stuff simply because it’s on sale or there’s a really good deal- buy it because you need/are sure you want it. For example, buying gummies in bulk (say 50 at a time) may save more money per pack them if you bought a 10- gummy package. But if you won’t eat 50 gummies before the expiration date, it’s not a smart choice since you would be wasting money on the gummies that weren’t eaten. If you would like to share any ideas you use, don’t hesitate to do so in the comments.
Being aware of every purchase you make, no matter how big or small, will help prepare for the future when you receive paychecks and need to plan out your money. Making wise decisions now, like spending first on needs, will help when you need to make big purchases for your home, family, and yourself. I think that as kids, we should learn these lessons early on so we won’t fall into the trap of spending money unwisely.