“If we aren’t careful, our children will come down with ‘affluenza,’ a disease that causes them to confuse wants and needs. We need to teach our children what my grandmother taught me: Think twice about spending money you don’t have on things you don’t need to impress people you don’t like anyway.”

– Michelle Singletary

Years ago, 3 friends made up their minds to set up sustainable sources of income and improve their families’ finances in 10 years. Remarkably, within just five years, they achieved a huge part of their goals faster than they had originally planned. When they were asked what they did differently, one of them said “We defined what drives spending for us and made sure we were never driven to spend money on things we didn’t need”.

This statement birthed this article – What drives spending: Needs or Wants?

Over the past few weeks ago, we took the time to find out how Nigerians on social media define needs and wants.

Now let’s come back to you. Picture this: It’s 2 weeks after receiving your monthly earnings, and you’re staring at your bank balance, wondering how it evaporated so quickly. Was it the new iPhone you couldn’t resist, the impromptu owambe you attended, or the daily stops at your favorite buka for that irresistible jollof rice?

Imagine telling your mother that you’re broke because you spent money on data for Instagram. She’d probably shake her head and mutter, “In my days, we knew the difference between what we needed and wanted.”

But let’s be honest, that line can be clearer in today’s Nigeria. 

• Is that monthly subscription to your favorite streaming platform a need to stay informed or a want for entertainment? 
• Is buying that cold bottle of soda in traffic a need for hydration or satisfaction for an unending craving? 

Welcome to the complex world of needs versus wants – a battlefield where our naira notes wage daily wars between necessity and desire. It’s a struggle as real as the Lagos traffic and as common as hearing “How far?” on the streets.

In this blog, we’re going to dive deep into the needs vs. wants debate. We’ll explore why your new aso ebi feels like a need (even when it’s not), how cultural expectations shape our spending, and why emotional spending hits harder than a bottle of cold soda.

So, grab your favorite chair, and let’s embark on this journey together. When we’re done, you’ll be looking at your spending habits with new lenses.

Defining Needs and Wants

Think of it as sorting your laundry – some things are essential (like your work clothes), and others are just nice to have (like that fancy agbada you wear once a year). 

Needs: The Non-Negotiables 

Needs are the bare necessities, the things you can’t do without – like an umbrella during the rainy season. These are the items essential for survival and basic comfort. In financial terms, needs are the expenses that keep you alive, healthy, and able to function.

Examples of needs include:

a. Food (doesn’t have to be expensive))

b. Water (pure water counts!)

c. Shelter (be it a rented room or family house)

d. Basic clothing (not necessarily designer brands, but enough to keep you looking decent)

e. Healthcare (especially those painkillers) 

f. Transportation to work (Don’t order Ubers every day) 

g. Basic utilities (electricity bill, even though the electricity in these parts of the world isn’t too frequent)

Wants

Your wants are mostly the “Nice to Have” Items

They are the extras – the icing on the cake, the suya on your bread. These are things that make life more enjoyable but aren’t essential for survival. Wants are often driven by desire rather than necessity.

Examples of wants might include:

1. The latest iPhone (when your current phone still works fine)

2. Designer Brand clothes (just to show off )

3. Eating out at fancy restaurants all the time (there’s always rice at home) 

4. The newest car model (when your old faithful still moves)

5. Vacation trips.

6. That expensive aso ebi for your friend’s wedding (this is your 3rd asoebi in 6 months) 

The Key Difference

Let’s go a bit clearer on Needs and Wants– Needs are about survival and maintaining a basic standard of living. Wants are about enhancing your lifestyle and increasing comfort or status. And most of the time, they are both relatively different based on people’s financial statuses and life situations. In simple terms, what’s a want for one person might be a need for another. 

For instance, a car might be a want for someone living next to their workplace in Yaba, but a need for someone commuting daily from Mowe to Victoria Island. The trick is to be honest with yourself. Next time you’re about to make a purchase, ask yourself: “Is this something I truly need to survive and function, or is it something I simply desire?” That moment of reflection could be the difference between financial growth and stagnation 

Wrapping Up: What Drives Spending?

We’ve journeyed through the land of needs and wants, from the essentials that keep us going to the luxuries that make life a bit sweeter. But remember, distinguishing between the two isn’t about living a life of lack – it’s about making conscious choices that align with your long-term financial goals.

As we’ve seen, what constitutes a need or a want can vary greatly depending on your circumstances. The key is to be honest with yourself and regularly reassess your spending habits. Are you buying that new gadget because you truly need it, or because everyone else seems to have one?

But here’s where it gets even more interesting: understanding the difference between needs and wants helps us understand what drives spending. However, our spending habits are deeply rooted in psychology, influenced by factors we might not even be aware of.

Now Over to You! What Drives Your Spending?

In our next article, “The Psychology of Spending,” we’ll delve into the fascinating world of why we buy what we buy. We’ll explore:

1. The hidden emotional triggers behind our purchases

2. How clever marketing tactics influence our perception of needs and wants

3. The role of social media in shaping our spending habits

So, keep your eyes peeled for the next part of this spending series. It promises to be an eye-opening journey that will have you looking at your spending habits in a whole new light.

Bravewood is licensed by the Central Bank of Nigeria to provide investments with low risk and high returns for Nigerian professionals.

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