When you are in a position of having to cut back on expenses, the first step is defining “needs” and “wants”. What items do you need to continue day-to-day life, and what are the items you want because they make things easier or more convenient? We have a few tips to help figure out the difference.


Wants can be items, services, or just a desire to have something. When cutting back on expenses, “wants” can, in most cases, be cut back or exchanged with a cheaper option. Life is survivable without these things.


Needs are anything you require to live your life. Basic human needs are food, water, shelter, and other necessities for living.

Determining Between Needs and Wants:

Sometimes, it’s straightforward to understand that some things are purely a “want”. For an unpopular example, you can always cut out the morning coffee run if you need to save money. Other times, “needs” and “wants” can overlap, making it hard for many people to make the best choice possible.

When Needs and Wants Overlap:

For instance, food is needed for survival. However, you can search for deals, clip coupons, or find alternatives to help match your current budget. Cutting back on eating out and cooking at home can save some major dollars.

You might be thinking of some things as a frivolous expense, but some “wants” have changed to “needs” over time. One example is your internet and phone bill. At one time, life could be lived normally without these things, but now in days, it’s almost as necessary as your other utilities. When job searching, most businesses only accept online applications. Many schools offer homework or classes online.

Everyone’s situation is different, so perhaps cutting the internet or phone has to be done to meet other more critical needs. However, we do recommend, no matter what financial situation you are in, setting a budget. It will help take some of the stress out of managing your money. R1CU offers a budgeting tool within online and mobile banking. Watch our video on setting up a digital banking budget here. We also have Budget Buddies, who are Certified Financial Coaches that can take an in-depth look at your situation, help set your budget options, and help with other needs you might have. The Budget Buddy service is free for members of R1CU.

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