Lesson 3 of 8

Needs, wants and personal priorities

Separate essential spending from flexible choices without judging the things that make life enjoyable.

Your goalUse needs and wants as planning labels rather than moral labels.

Context changes the answer

A car may be essential for one household and optional for another. A phone is usually necessary, while the newest model may be an upgrade. Categories depend on the role an expense plays in your life.

Wants are allowed

A sustainable budget makes room for enjoyment. The purpose is to choose wants consciously and keep them from displacing higher priorities.

Priorities connect the plan

A priority may be stability, education, family support, travel, debt freedom or rest. When two expenses compete, priorities help you decide which one receives money first.

Practice

Make this lesson real

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