A need is something you have to have, something you cant do without. Example: food, water, home.
A want is something you would like or that would make your life easier. Example: Car, designer clothes.
Needs are usually based on a fixed expense. Each month you pay on specific days and for specific amounts. Once you commit to a fixed expense it is very costly to change this expense without consequences.
Each month you pay for some items on specific days and for specific amounts. › Fixed expenses These expenses are cannot be called fixed or regular changed easily. expenses › Late or missed Examples Include: payments can › Rent cause problems › Mortgage such as late fees, › Car Insurance eviction, legal action, or having › Cell Phone Contract your utilities cut off. › Utilities-Power, Water, Cable, Gas.
Flexible expenses have more choice in how much you spend and when you spend it. Wants are usually flexible expenses and may vary in amount from month to month. Some examples are food, clothing, and personal items.
You also have Some examples are other expenses food, clothing, and that are flexible or personal items. Flexible changing. expenses may vary in Flexible expenses amount from month to may be important, month. but you have more People who keep choice in how spending records are much you spend often surprised how and when you much they spend on spend it. things they don’t really need or want.
Anytime you borrow money you incur a debt. Debtors are those you owe money to and often times charge interest for loaning money.