No matter what we’re buying, we all want to spend less. While we obviously want the items themselves, we also want to retain enough so we can have more with the same funds – whether for savings or for more items. The difficulty then is figuring out how to save while spending.
The most important step to smart shopping is knowledge: are you paying more than you should for an item? Is it available cheaper somewhere else or, possibly, free? But perhaps, most important of all, is whether we need the item or whether we want it.
As Managing My Money notes:
“Needs” are what we need to live. “Wants” include everything else we might like to have, but we don’t need to survive.
If you’re able to survive and function in your life comfortably without an item or service, that means it is a want – not a need. And prioritising needs over wants is what matters. That is, you should focus on paying your bills over paying for the newest TV.
While is seems obvious, most people don’t ask themselves this question when faced with a Want item. We don’t think twice about paying our bills or other Needs, but how often do we balance our Wants? “Is this necessary? If not, why do I want it?”
Consider for example, cars: Do we need to get a brand new car or should we rather look at pre owned cars for sale? And, then, even here, there’s a question of quality. As Edmunds notes, people are willing to pay more for certified pre owned cars when buying second-hand cars.
Jessica Caldwell, Edmunds.com director of Industry Analysis, notes: “These cars offer a unique value proposition to shoppers who want to pay used-car prices but demand the peace of mind that comes with a new-car purchase.”
Here, we note that smart shopping leads to paying more – but in the immediate, rather than longterm sense. After all, you could end up paying more in terms of constant repairs and other aspects for a car that isn’t properly maintained or certified by the manufacturer.
Wants and needs are central to making smart decisions when it comes to shopping, whether for cars or even groceries – asking the question of where something belongs on either list can help determine our answer and stop us spending frivolously, to the detriment of long term savings and finances.