Needs vs Wants — how Penny tells the difference

Every time you want to buy something, Penny asks you these three questions in her head:

1. Do I really need this?
2. What happens if I DON'T buy it?
3. Is there something cheaper that does the same thing?

Three seconds. And you usually know the answer.

Needs (things you need)

A need is something you MUST have to live healthily, safely or normally.

Examples:

• Food and drink
• A roof over your head
• Clothes that fit (not 50 pairs — but a few)
• School supplies you need for class
• Transport (bike, public transit)

Needs often feel a bit boring. But without them, things can get really annoying.

Wants (things you like)

A want is something you LIKE, but you can live fine without it.

Examples:

• A new game while you already have 5
• Snacks at the checkout
• The newest brand-name shoes
• A 3rd cap
• Something because a friend has it too

Wants usually feel important in the moment — but a week later you've forgotten about them.

The Penny test

Before you buy something: ask yourself one question.

"If I DON'T buy this, will something go wrong?"

• Wrong = you can't go to school tomorrow, you have no food = NEED
• Wrong = you're disappointed for an hour = WANT

It's not wrong to buy wants. It's just useful to KNOW it's a want.

Penny's trick: the 48-hour rule

If you see something and you want it NOW:

1. Write down what it was
2. Wait 2 days
3. Do you still want it after 2 days? Then it's probably a good buy.

Nine out of ten times you've forgotten about it after 2 days. That was a want.

A wants-list is worth gold. Write wants on a list. Look at it a week later. You'll laugh at what you wanted then.

Try Penny's tool

Before you buy something, open Can I Afford This?. Three questions, one honest answer.

— Penny 🧢