Needs versus Wants

Our financial coaches have seen an increased interest in budgeting lately, and it’s no surprise. With inflation in the headlines pretty much everyone is thinking about where there money is going.

If you’re just getting started with budgeting, or if you’ve been doing it for a while, it’s a good idea to regularly count up your needs. Your needs are the priorities for your spending; housing costs (rent or mortgage), food, insurance, transportation. These are things you can’t give up; you need them to live, or work, or both. Once you have your list of needs, total up how much they cost every month. That’s a great start to figuring out how big your 3-6 month emergency fund needs to be. At minimum, you’ll need to pay these needs every month.

It can be tough to know if something is truly a “need” or if it’s really just a “want.” Your answers are probably going to be specific to you (or your family) so it’s worth taking time to figure this out for yourself. If you need help getting started we’ve got a short guide here.