Needs and wants

Financial goal setting means to save for what you really need as well as what you want.

A need is something you cannot live without, something you must have. A want is something you would really like to have but can live without. Wants are things that make people happy or may make life seem a little easier or a little more special.

Examples:

• We need clothes to keep us warm, but is an expensive, fashionable T-shirt a need or a want? (Want)
• Is a pair of school shoes a need or want? (Need)

Distinguishing between your needs and wants helps you to decide where best to spend your money, so that you will have enough to save too.

Activity
Make a personal financial goals list. In it you can list:

• What you want or need to save for;
• How much you will have to save; and
• How long it will take you to save the specific amount.