How do you know the difference between needs and wants in your money life? Where is that thin line between, “I need this” and “I want this” when it comes to earning and spending your money?
This week, one of my Group Coaching students asked me to clarify this, and inspired today’s article – what a great question for all of us, as we deepen in our conscious money relationship!
Let’s start at the beginning. Before moving forward, taking action, and making choices, we often need to dip into our past to find out how 
it’s creating our present.
Here’s the first question (it’s a big one):
Were your needs met as a child?
So many of us did not get all of our needs met when we were growing up. Maybe our parents weren’t able to provide a safe home for us, or maybe they weren’t able to create a safe emotional space.
At some point as adults, most of us come face to face with a crucial developmental phase where we need to re-learn how to listen to and understand our deepest needs. I honor this. This can be a beautiful, healthy expression of discovering how to take care of ourselves.
However, sometimes our attempt to get our needs met can become distorted, an unsuccessful strategy to fulfill the missing pieces from our early development.
We can stumble here, getting stuck in a loop as we try to fulfill all these needs, running around following every impulse as it occurs. We search for the boyfriend, the pair of shoes, the bottle of wine, the vacation, the home . . . that can finally make us feel taken care of.
The truth is, nothing will ever fill this need except healing that child in us and connecting with our deepest Self. The good news? As conscious adults, we have an amazing capacity to re-parent ourselves, and heal from this deepest place.
We can step back, breathe in, and engage:
What are my truest needs in this life? Which ones were not met early on? Which ones were met? How I can I meet them now, as a conscious adult?
As we step outside of our unconscious attempts to get our needs met, we seek balance. We learn how to use our hearts, our minds, and our current financial reality to make our money decisions.
Only from this place of deep inquiry into your patterns, can you move into really hashing out your needs and wants in our money relationship.
From a financial standpoint, we can define needs & wants like this:
Needs are things you must pay no matter what: housing, food, utilities, transportation costs, health insurance, basic self care.
Wants are everything else: restaurant meals, entertainment, fancy clothing, travel, retreats, the list goes on and on . . .
I find Elizabeth Warren’s allocation formula, described in her book All Your Worth, very helpful here.
She suggests that a balanced, happy financial life could look like this:
50% needs
30% wants
20% savings
We meet our needs first. Then, we meet our wants as our financial reality allows. And anything left over, we put towards our future in savings.
This is just one model for thinking through this. As usual, we all need to find our own way here.
In my teaching, I use a similar model called the 3-Tiers Budget.
In it, we map out the first tier of our budget based on our basic needs: non-negotiable expenses we must pay for. In the second tier, our wants come into play as we map out our Comfortable Lifestyle budget. This often includes many of our wants, but perhaps not all of them. From there, we can envision the 3rd tier, our Ultimate Lifestyle Budget, which encompasses all of our deepest desires, plus giving and saving galore.
No matter how much money you have coming in, it’s so helpful to map out each of these tiers. Why? Because it empowers you to make conscious choices.
Once you’ve mapped out your 3 tiers, it’s time to look at your numbers and choose based on this moment in your money story, and your current financial reality.
The Bottom Line(s)
- Do the deep work.
- Map out your needs, wants, and desires – all of them.
- Know the context of this moment in your money story (look at your numbers).
- Make choices that reflect the whole of who you are – your heart, your soul, your mind, your numbers.
No small task, I know. But on the other side of this brave work is what you’ve been looking for: empowerment, clarity, balance, peace . . . financial transformation.
It’s worth it, dear friend!
