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Needs and wants
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Needs and wants: 5 important facts to know the difference

When you ask students to tell the difference between their needs and wants, the answers are surprising. They say that they cannot live without their cell phones, a car, the latest outfits, a bed, cheesy pizza and of course, money. These are considered needs and the wants become a fuzzy area for them.

Students of business learn the difference between needs and wants as they start the course. This knowledge is the foundation for the system that exists in the world today.

Even if you are not a student of business, it is beneficial for you to know your history. This makes you more appreciative of everything you have right now.

It would definitely change the way you see things, lighten your mood and encourage you to approach life differently. Here are 5 important facts to know about your needs and wants.

5 facts to tell the difference between needs and wants

1. You only need food, clothing and shelter to survive

To survive, your body requires food which includes water, clothing to stay warm, and shelter to protect you from bad weather and other harmful elements. Early men and women lived for many years on these three things only. They hunted, cooked, wove blankets and built houses with their bare hands.

In modern times, it is necessary to clarify the grey area for food, clothing and shelter. Food must include nutrients, vitamins, minerals, carbohydrates, proteins, and fats. Clothing must cover the body so that it feels warm in cold weather. Shelter must have four walls, a roof and a door. Everything else is a want.

2. You can provide your basic needs for yourself

The fun part is once you have passed the baby stage of your life, you can provide your basic needs for yourself. People are created with a natural gift to learn anything they want to do. Early men and women figured out how to hunt, fish, plant, cook, shear a sheep, weave the coconut branches, and build mud houses.

Today, the information is at your fingertips, thanks to modern technology. You can provide your own food by starting a home kitchen garden. You can learn to sew, knit, and crochet your favourite outfits. Start watching “Do It Yourself” videos about home improvement and fix your house for yourself. When you successfully fulfill your own basic needs, your wants would become very clear to you.

3. You can create your own surplus

The foundation of business is having surplus after satisfying your needs and trading it so as to satisfy your wants. Early men and women worked tirelessly to provide a large deer, a load of fish, trees and plants that were laden with fruits and vegetables, and cows that gave excessive milk. This is when needs and wants became clear cut.

One family could not consume everything before it spoiled so the surplus was either thrown away or put to work to improve their way of life. You can do the same. Plant, cook, or make something in abundance. Use what you need and sell your surplus to obtain the things that you desire.

4. You can specialise in a particular area

If you are passionate about something and you are really good at doing it, you should specialise in that area to satisfy all of your needs and wants yourself. What you should know though is that becoming a successful specialist requires making a lot of sacrifices. This teaches you exactly how different needs and wants are from each other.

Entrepreneurship is the heart of business. You have to work excessively for the first three to five years of your life before you see the rewards. After that, the profits would flow in and you would not regret all of your efforts. If you decide that entrepreneurship is not for you, then at least you would have a far better understanding of what really are needs and wants after the experience.

5. You can satisfy your wants for yourself

Appreciate the food, clothing and shelter you receive without effort and create a way to satisfy your wants for yourself. If you are depending on other people to provide your needs and wants, then you should ease them up a bit because they are also working very hard to satisfy their own needs and wants.

Now that you understand how much work is required to satisfy your needs alone, you can calculate how much extra work is needed to satisfy those wants of yours. You can plant food, design clothes, jewellery, and art pieces, write articles and take photographs for websites, create videos, or bake goodies. Sell your work and make enough income to satisfy all your needs and wants for your yourself.

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ALICE: Assets, Liabilities, Income, Capital, Expenses

Assets: Owned fixed and liquid items with a debit balance

Liabilities: Owed long and short term items with a credit balance

Income: Earned, unearned and contributed money

Capital: Invested assets and the liquidity of a business

Expenses: Spending that’s direct, indirect, operating and non-operating

Goods for resale: Stock, Purchases, Sales, Carriages and Returns

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