For some people, it can be incredibly difficult to discern the difference between what they want and what they need.
Here is just one practical example:
Let’s say someone goes to a mall to replace a broken dish. Walking through the mall, they see a shirt in the window that would go perfectly with one of their outfits. (People generally want to look nice, and clothes are usually viewed as a means of achieving this.) Excited about the new wardrobe match, they try the shirt on.
Not only does it look sharp, the sales associate adds a little boost, confirming that the shirt does indeed look perfect. At this it point it’s common to believe the shirt is a necessary purchase. They may feel so strongly about the shirt, in fact, that giving it up can even cause them to feel a sense of pain or loss.
Let’s step back and take a look at the situation though. Why did they go into the mall in the first place? To replace a broken dish. But what did they walk out with? They probably left with both the dish, and the shirt.
In fact, “need” for the shirt probably felt even stronger than the need for replacement dishes, even though they had no intention of shopping for it in the first place.
At a first glance, this example might seem like a harmless purchase. These purchases add up overtime, however, and can be quite damaging to a person’s finances. We have seen, firsthand with our own clients, that compounded mistaken needs – for everything from clothes to home renovations, car upgrades, travel or electronics – can add up to thousands, if not tens of thousands of dollars, over the course of a year.
How can a Personal Financial Trainer help?
Discerning the difference between needs and wants can be a mucky business, but mistaking our wants and needs can be a financially crippling source of strife.
It is possible to be become crystal clear about real needs and those that aren’t, but it takes time and the right team to help you realize the difference, change those shopping habits, and yield the financial benefits.