When taking control of your money, it’s important to address how you spend money. It’s essential you understand the difference between your needs and wants.

Once you have a handle on spending, you free-up money for savings. It’s a balancing act which requires discipline.

How do you distinguish the difference between needs and wants?

Simply ask yourself,

“What would be the worst thing to happen if I don’t buy this item?”

Pay attention to the cause and effect when answering this question. Here are a couple of examples.

If you don’t buy gas for your car, you won’t be able to drive to work. Without going to work, you will be fired. Without work, you won’t have money to spend. From this outcome, buying gas for your car is a need.


If you don’t buy those shoes, you’ll be frustrated. You won’t be able to brag about them on social media. You still have other shoes to wear but you won’t have those shoes. Buying those shoes is a want because you have other shoes you can wear.

Deciding between needs and wants can be tricky when you have options. For example, we all agree food is a need. If you don’t eat, your body goes into starvation mode. You eventually lose energy and muscle mass. Food is a necessity for our life.

But deciding how much to spend on this need can be tricky because you have options. For example, you could go grocery shopping and spend $50. This amount will give you three meals daily for one week or 21 meals costing $2.38 per meal.

You could decide to eat out every meal. Maybe spend $10 for breakfast, $20 for lunch, and $30 for dinner. In one week, you would spend $420 or $20 per meal.

Another option is to purchase a package that delivers to your home ingredients and recipes for $60. This pricing gives you three meals each for two servings in one week. A total of 6 meals (for one person) costing $10 per meal.

When faced with options, price is important but also look at your lifestyle. Is it realistic for you to dine in every meal or do you enjoy going out with friends? Or maybe you travel for work and will be gone most weekdays.

When making decisions on options consider asking yourself,

“If I choose a lower cost option, what can I do with my savings?”

Using the same food example, let’s say you decide on a combination of dining out and grocery shopping. Instead of spending $420 per week, you spend $200.

With the $220 savings, you can continue to build your emergency reserve, pay down your education loan, and save for a ski trip. Changing your spending habits becomes easier when you have other things you want to do with your money.

Becoming disciplined in your spending will help you achieve your lifestyle aspirations faster. If you need help taking control of your money, work with a Certified Financial Planner™ professional. This person will help you identify ways to reduce spending and step-up savings so you can live the lifestyle you want.

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Niv PersaudNiv Persaud, CFP®, CDFA™, CRPC®, is the Founder of Transition Planning & Guidance, LLC. Life is more than money. It’s about living the lifestyle you want and can afford. For that reason, Niv consults with clients on money, life and work. Her approach capitalizes on techniques she learned throughout her career, including as a management consultant, executive recruiter and financial advisor. Her services include spending plan, financial plan, divorce financial review, life strategy and professional progression. Niv actively gives back to her community through her volunteer efforts. She believes in living life to the fullest by cherishing friendships, enjoying the beauty of nature and laughing often — even at herself. Her favorite quote is by Erma Bombeck, “When I stand before God at the end of my life, I would hope that I would not have a single bit of talent left and could say ‘I used everything you gave me’.”