Why is knowing the difference between needs and wants important in financial matters?

Question

 I need help with this question I don't understand it and its from a Human Sevices teacher and I am in Ninth grade a fresh man

Answer 1

If you are going to carefully use the money you have and earn, you have to prioritize what you spend. There are many ways to look at this, but imagine that you are an adult and totally responsible for yourself. You make a salary and you have to pay for taxes first. Next, you have basic human needs. You need a safe place to live, so you have rent. You have to have water and heat and lights. So you have to pay those bills or you may be sitting in the dark! You need food. You need basic nourishment first - things you can buy at the grocery store and cook. You need some clothes to wear at home and to work. You need a basic wardrobe so that you look like you know what you are doing. You need transportation to work. Maybe a car. Maybe the bus or subway. Each month you have to set aside enough money to cover all of those expenses. Those are all needs. How about wants? Maybe you want a fancy car. You want expensive shoes. You want to go out to dinner at a $100 per person restaurant. You want to go to a coffee shop and spend $7 on a latte. Many, many people fail to distinguish between needs and wants. They get a credit card and buy things they cannot afford. They pay high interest rates to the credit card company for these things. It is perfectly ok to buy what you want if you can pay for it. So if you can look in the mirror and say, Do I need to buy this? Or do I just want to buy it? You will be set to save for the future and have a fantastic life. Knowing what you need vs. want is a sign of maturity. Excellent question!