Managing Your Money: Needs vs Wants

We recently talked about how to make your financial aid refund last through the entire semester. Whether you get money from financial aid, your parents, or working, you need to manage it wisely. Setting up a spending plan helps you do that.

Making Decisions

Part of putting together a simple budget (spending plan) is identifying necessary expenses (housing, food, transportation, tuition) and the not-so-necessary ones (entertainment, concerts, traveling home if you don’t need to). In other words — needs vs. wants.

Needs are required to survive; wants are the fun treats and extras in life. I’ve found that people get into trouble when they borrow money to pay for their “wants.”

These days a cell phone is a necessity, but do you need the latest generation smartphone? Try making do with your older phone a while longer.

Putting it into Practice

Before you make a purchase, ask yourself, “Is this something I really need to have or just something I want to have?” Be honest with yourself and ask, “Can I live without this item?” Chances are you can do without that treat. It’s not a need; take a moment to decide if there’s room for it in your budget and if you can really afford it.

You can still have wants but think about spending less money on them. If you are going to the movies, consider going to the first show of the day because those tickets are usually cheaper. If you stop for breakfast tacos every morning, change up your routine to make it 1 or 2 times per week and grab breakfast from home to save some money.

In the end, you get to decide what your priorities are and how to spend your money. Putting a little more thought into what you buy can take the stress out of your financial situation in the long run. And that’s priceless.

Watch for more from the Coaching Corner soon!

About Melanie

I am a Financial Coach for college students and parents. I am an Accredited Financial Counselor (AFC®) and received my BBA in Management from Texas State University. I help students understand their financial aid and help them develop a plan to achieve their educational and financial goals. I was a first-generation college student, so I have a personal understanding of some of the struggles students face.

Working in the financial aid industry for 13 years has given me the opportunity to work with students at different points in their life from starting college to graduating and finding a job — all the way through helping them repay their student loans and save for the future.