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I have been reading today and based on some of my research on my other blog posts, it sparked a question that I wanted to put up here for discussion:
How do you distinguish between your wants and needs?
I know a lot of us feel that some of our wants are in fact needs but what really drives you to know the difference? We had discussed about keeping a journal or diary of your spending for a month or two have you had any success?
Photo Credit: swanksalot
Feel free to comment, I am just trying to see how you stand with your financial goals!!
Derek Allen
February 22, 2010 at 10:04 amIt is really a tough question, determining between wants and needs. Essentially, we only need food, water, shelter, and clothing. Though that would lead to a very dull existence. I think it boils down to utilization. If you spend money on luxury items, are you utilizing their full value? Extra spending is necessary from time to time, just make sure you get the full value from the investment. Otherwise, it is just money spent in vain.
I use http://www.mint.com to track all of my expenses. It automatically categorizes any purchases I make with my debit card. It has been useful to determine areas where I spend too much money and help me create a strategy for cutting back.