Needs vs. Wants
01.The Golden Rule of Planning
Before spending a single dollar, you need to understand the difference between a NEED and a WANT. A need is something you MUST have to survive and stay healthy. A want is something that is nice to have, but you can live perfectly fine without it.
02.Spotting the Difference
Water, healthy food, a warm coat in the winter, a safe place to live, and basic medicine are NEEDS. Video games, candy, designer shoes, and movie tickets are WANTS. If you spend all your money on wants, you won't have enough left for your needs!
03.Making Smart Choices
Smart money planners always take care of their needs first. Once the needs are bought, they can set aside some money for wants and save the rest. It's about prioritizing so you never run out of the essentials.