Distinguishing Needs from Wants

Recognizing the difference between needs and wants is crucial for prioritizing spending, especially when budgets are tight. Basic necessities include food, shelter, and healthcare, while wants can blur the lines when additional items are desired without being essential. For example, wanting a fashionable pair of shoes when you already have adequate footwear illustrates this confusion. By understanding these distinctions, individuals can make more informed financial decisions that align with their actual needs.