One of the most important aspect of financial planning is to spend our money wisely. Now, what does it mean if we are going to spend it wisely? Well, we can actually categorized it by defining what is our needs and wants. We all know how improper handling of money affects when you spend too much of money on your wants and not on your needs, right?
The first aim should be to spend money for your needs and then take care of your wants . Once you prioritize all your expenses in these categories, then its much easy for you. Needs is something which is essential for you irrespective of your financial conditions These are the things you have to take care first and only then comes other things which you can do without such as house expenses, child education and medical expenses.
While wants are those things that we wish to have like car, extra vacation, clothes, accessories and many others. Some people wants can be their needs. It all depends on your personal life style and attitude but the main point there is that you have to differentiate your needs and wants. You just have to understand the point that wants are not something which you should avoid, but your needs should not be compromised because of your wants .