Lesson B: Wants Vs. Needs

Wants vs. Needs

It is important that consumers understand the difference between wants and needs. A need is something that is required for health and safety. Examples of needs are food, shelter and clothing.Wants are things that are desirable or of interest. Wants are not necessary for your survival.Examples of wants are designer clothes, luxury cars, and big screen televisions. At times there can be a fine line between needs and wants. An example would be, you need a new car but you don’t need a new $50,000 car.

Exercise
In this exercise list some the items you would like to purchase in the near future. Determine if they are needs or wants. Remember, needs are items that are necessary for your survival.

ITEMS NEED OR WANT
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Your needs should always take priority over your wants. Generally your goals should be centered on your needs. A word of advice; Budget for needs and save for your wants.

Quiz

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1.	Buying a home is an example of a need.	True/False
2.	Buying a pair of designer jeans is an example a need.	True/False
3.	Buying groceries is an example of a basic necessity.	True/False
4.	Spending on extravagant meals in gourmet restaurants is an example of a want.	True/False
5.	Understanding the difference between wants and needs helps you to establish better goals.	True/False