The wants vs. needs tool is not working.  And if a tool isn’t working, stop using it.

Approximate read time: 6 minutes.

What’s the difference between a want and a need?

Wants vs Needs is probably the second most common financial “tool” I hear my clients trying to use. But just like “I just need to get my act together” and “Save 10% of your income”, wants vs needs is a decision-making strategy that just doesn’t work.  It’s not that people aren’t doing it correctly, it’s not that their priorities are out of order, it’s that the tool itself is GARBAGE. Let’s talk about why it’s garbage, and then talk about what I teach (and use) instead.

Reason #1 Wants vs Needs is Garbage: It’s too easy to justify a “need”

For a while I played bass drum in a bagpipe band. And after one particularly hot, particularly long parade march it became clear that I wasn’t going to make it home without getting re-hydrated. I stopped at a gas station for gas and went in to get some water. I grabbed a bottle of carbonated water and headed to the checkout.

Here’s how the wants vs needs assessment goes for me and that bottle of water: I just worked really hard, I’m hot, tired, and dehydrated, humans need water to live, therefore I need this bottle of water.

Assessment over. Now that I’ve checked that box I can feel good about this bottle of water. But maybe that wasn’t the “right” choice… how would I know?

Reason #2 Wants vs Needs is Garbage: It’s too fast

I don’t want to stop my client’s decision making process… crisis and trauma do that. I only want to slow it down a little. This space between knowing a choice needs to be made and making the choice is a precious moment in time we can never get back. Wants vs Needs (WvN) allows us to slip through that moment lighting fast.

Reason #3 Wants vs Needs is Garbage: It’s too clunky

The world doesn’t fit so neatly into clean categories. It’s not very often in our adult lives that we get crystal clear black and white options. There is far too much complication and nuance to our lives for us to be able to fit everything into one of two columns.

Choices aren’t made in a vacuum. All of our decisions impact all the other decisions we will make. WvN is far too myopic for our beautiful, intricate, changing lives. I don’t want anyone’s life to be so dumbed-down and limited that they could sort all their choices into good/bad or want/need. Having this expectation of ourselves will set us up for failure, and will not allow for change, emergencies, or opportunities.

Reason #4 Wants vs Needs is Garbage: It sets us up for failure

Sometimes the choices we make using WvN turn out to be good for us long term, sometimes not. When the latter happens, we tend to think that we somehow used this tool wrong. No, you didn’t… you used the tool just fine, it’s just a really dumb tool.  We tend to see the inconsistent feedback we get from garbage financial tools like this as our own failing without ever stopping to think that it may be the tool that sucks, not us.

Just because you’ve heard or said this piece of “wisdom” a million times doesn’t mean it’s wise.

Three steps to better decision making

I use and teach a tool that is a little slower, a little more detailed, but still easy enough to deploy in the service of making better decisions. And not just spending decisions, but in almost all decisions.

Note: This tool is best used for high-frequency, low cost/risk choices from daily spending up to a car purchase. For larger, low-frequency, high cost/risk choices like home purchases, starting or stopping relationships or jobs, this tool will not suffice. Please see Negative Visualization training.

The easiest way to know if a choice you’re considering is large or small is to ask yourself “How big is the potential impact this choice will have on my life?” If the answer is that the potential impact (not the cost in time, energy or money) is huge, this probably isn’t the right tool.

Step 1: What are the possible values of this choice?

The value of choice CANNOT be its price. Too often we conflate the value of something with its cost.

And we’re not just talking about its monetary price, but also in the time and energy cost of a choice. Essentially, what service does this choice, purchase, or option provide to you?

Let’s go back to the bottle of carbonated water and practice this idea of values assessment to dig a little deeper.

Possible values of a bottle of carbonated water:

Hydration is necessary for life.

It’s cold and I’m hot/ it will be refreshing

I have it in my hand/ It’s convenient

It’s delicious.

It’s __________.

There are echoes of the WvN assessment here, right? That’s ok, we just need to explore and dig into the reasoning a bit more.

Let’s think about the value of “delicious” for a moment. While we are intentionally using language that steers us away from emotion, we do need to factor it in to our assessments. I love carbonated water, but someone who finds it disgusting would evaluate this differently. What you find satisfying, pleasurable, comforting, nourishing, disgusting, repulsive, or nasty should be part of this assessment, but it should not be the only thing we use to evaluate our choices.

We’re just practicing on a bottle of water so our list won’t be very long. What other values of this bottle of water can you think of?

Step 2: What are the possible risks associated with this choice?

The risks of a choice CAN and should include its cost. The monetary cost of this bottle of water was $3. Applying the concept of an opportunity cost to this is pretty intuitive…. Once I spend this $3 on this bottle of water I cannot spend that same $3 on anything else. I can spend a different $3, but not THAT $3. Where opportunity costs can get fairly philosophical is when we apply the same concept to the time and energy it took to make that $3. Even if I’d found $3 laying on the ground it would have taken me a very little bit of time and energy to pick it up. I cannot spend that time and energy on anything else.

Economics typically focuses the opportunity cost on monetary costs, but rarely turns that same assessment on how we spend our time and energy.

We can always make more money. We can always make more energy. The one thing we can never make more of is time.

So we have one risk so far:

The opportunity costs of spending my time, energy, and money on this bottle of water.

Other risks could be:

It could be flat.

Maybe it was made incorrectly and now it’s gross or unsafe.

It could be ________.

What other possible risks can you think of for this bottle of water?

Step 3: Is there any other way?

Specifically is there any other way to get some of the values without some or all of the risks.

Let’s go back one last time to the convenience store where I’m standing with my bottle of water.  In just a few seconds I’d run through the possible values and risks of buying this bottle of water, now I ask myself “Is there any other way to get some of the values of this bottle of water without some or all of the risks?” I turn my head, looking around, and guess what I see…

A drinking fountain. One of the big refrigerated ones.  I could have then done the assessment again with the values, risks, and any other ways of the drinking fountain, but instead I just put the bottle back and sucked down a bunch of refrigerated water.

Sometimes there is no other way. What is important is that we are taking the time to LOOK for other ways.

Often in the headlong press through our lives we don’t look for other options. Feeling like we don’t have or can’t take advantage of more than one option is a kind of crisis. By teaching ourselves (and others) this three-step assessment we bake in the idea that we always need to look for other options.

What are some Any Other Ways for this bottle of water?

I could get a cheaper bottle of boring water.

I could hold out until I get home.

If I can find a drinking fountain I can drink from that.

I could get a cup and get water from the soda machine.

I could ______________.

Secret Step 4: Repeat

Repeat the assessment as many times as you like with as many Any Other Ways as you like. Kids get a kick out of playing this as a game, and I encourage it as a decision making tool you can teach off-the-cuff that will ultimately serve your children by helping them slow down their decision making process.

Words are important

We are being intentional about the words we are using. By staying focused on values and risks rather than rewards, punishments, or benefits, we are keeping the focus on non-emotional choices.

We aren’t even using words like “good” or “bad”.  We aren’t assessing the “benefits”, and we aren’t asking if we deserve or do not deserve a thing.

Be specific

If a possible value of a choice is “It will make me feel good” or a risk is “It will make me feel bad”, explore that. Whatever is lurking under that assessment based on feeling is probably more important than the choice itself.

Certainly emotions can be a factor. A potential risk for buying a new sweater could be that I may feel guilty for it later, but we are not solely using that guilt to make the choice.

It’s not about you

We are not assessing your worth here. No where in the assessment do I ask myself if I DESERVE this bottle of water, but that can certainly sneak in during the WvN.

This is NOT ABOUT YOUR WORTHINESS.  It’s soley about the worthiness of how a potential choice that costs you any amount of time, energy or money.


Practice this assessment tool on the smallest, silliest choices. What are you having for dinner? If your options are tacos, salad, or pizza, what are the values, risks, and any other ways for each of those things?

What are some values to wearing the blue shirt today? Risks? Is there any other way to get some of the values of the blue shirt without some or all of the risks?

By intentionally practicing this tool on the silliest, low-risk choices, our brains begin to learn the script of this tool.  Then when a slightly bigger choice pops up, our brains deploy this tool without us even thinking about it.

You’re probably already doing this.

This decision making tool is designed to be intuitive. You probably already do all three of the steps described above. The goal here is to be INTENTIONAL about it. By practicing on silly choices and being considered about this our decisions get better and better.

How would your life look different if even your smallest choices served you better?

Reflection prompts:

Which step in this decision making tool did you already use?

What do you think you’ll notice as you begin practicing Values vs Risks/Any Other Way?

Last updated: February 2024

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