Budgeting Basics: Wants vs. Needs

When it comes to creating a sustainable budget, defining your wants and needs is key to success. Let’s explore wants and needs and how they fit into your budget.


Survival Needs

Needs are specific to what is necessary for your survival. This includes:

Shelter- You need a place to call home

Food- You need food to fuel your body

Transportation- You need to be able to get to work or school

Clothing- You need protection from the elements

Hygiene- You need to be clean to stay healthy

Utilities- You need running water and electricity

Healthcare- You need access to treatment, medications, etc. as necessary


Humans also need connection, love, sense of purpose and belonging, and a sense of security to live a fulfilling life, but those don’t necessarily factor into your budget.


Emotional/ Mental/ Social Wants





Fast Food


Home Décor






Your wants are important, but not as important as your needs. Your needs need to take priority when budgeting. Your wants are secondary to your survival and fit into your budget after your needs are handled. By creating your budget around your needs, you’ll remove the stress that comes with unstable and unfulfilled needs. Your wants should take up no more that 20-25% of your budget, and you still need to factor in debts and savings.


Each need category can have multiple subcategories. For example, transportation may include gas, car maintenance, registration and insurance. Be sure to factor each subcategory into your budget. Keeping your needs forefront in your priorities and sticking to your wants limits will continue to ensure your budget will be sustainable.


If you are just starting out with a fresh new budget, you can use the envelope method to help you stick to the budget. Create envelopes for your wants and put the cash you have allocated for each want into the envelopes. If you run out of money for a certain envelope, that’s it for the month. You can replenish that fund next month. This will help you ration your funds and prioritize them as well. Personal finance and budgeting are habits, and just like any habit, they take time to build. Be flexible and figure out what works for you and what doesn’t. Analyze your spending habits each month so that you can modify your methods to better suit you as you go.