We All Have Needs, But What Does That Have To Do With Finances?

23 Jan 2023

We all have needs, there are different kinds of needs and those unique needs can all affect our financial outlook and how we financial plan for the future. We’re going to dissect these needs and find out what they are and why they’re important for your financial health.

What are real and perceived needs?

Real needs are those that are essential for survival and well-being, such as food, shelter, clothing, and healthcare. They are the basic necessities required for living a healthy and fulfilling life. Examples of real needs include:

1. A safe and affordable place to live.

2. Adequate nutrition and access to clean water.

3. Clothing to protect from the elements.

4. Access to medical care and healthcare.

5. A reliable means of transportation.

Perceived needs, on the other hand, are wants or desires that are not essential for survival but are considered desirable to have. These can vary greatly from person to person and can be influenced by factors such as culture, upbringing, and individual values. Examples of perceived needs include:

1. A luxury car or designer clothing.

2. A large, expensive home.

3. A membership to an exclusive gym or club.

4. A vacation home or expensive travel.

5. The latest gadgets or technology.

It’s important to understand the difference between real and perceived needs in order to make informed decisions about how to allocate your resources and achieve your financial goals. While it’s definitely okay to have perceived needs, it’s important to prioritize real needs and make sure they are met before focusing on perceived needs so you don’t end up with a fancy car but no money for groceries.

What are current and future necessities?

Current needs are the immediate necessities that you require to survive and maintain your standard of living in the present. These are typically expenses that you need to pay for on a regular basis, such as rent or mortgage payments, groceries, transportation costs, and medical expenses but can also include utility bills, insurance payments, transportation costs and childcare expenses.

Future needs, on the other hand, are expenses that you will need to pay for at some point in the future. These can include short-term goals, such as saving for a down payment on a house or car, as well as long-term goals, like saving for retirement.

It’s important to consider both current and future needs when developing a financial plan, as this will help you make sure that you are able to meet your basic needs now and in the future.

Once you’ve picked apart and categorized your own needs, your next step is making a plan for your goals. We can help! With our investment calculator, you can see how your goals can grow.