One of the biggest steps to improving your financial health is identifying the difference between needs ands wants.  If you’re like me, then you’ve been hearing ( or saying ) the phrase "I need this" or "Do you know what we need?" or "What we really need is".  Many things seem like needs – especially when you’re used to saying that all the time.  The reality is that most "needs" are really "wants" in disguise.  Let’s take a look at the difference.

Examples of needs:

• A place to live
• Food
• Water
• Clothing

Examples of wants:

• A 6 bedroom, 4000 square foot house in Malibu
• Filet Mignon
• Dasani
• Dolce & Gabbana clothes

Do you see the difference?  Is your quality of life really going to improve if you buy that $130 shirt vs the $30 one?  How about the $30 steak vs the $8 one that you cook yourself?  This concept extends to everything that you buy.  Whenever you catch yourself saying that you "need" something, take a minute to think about it.  Will buying that thing that you need drastically improve your quality of life?  Is the electric cheese grater really the best use of your money?  And the real kicker – could you live without it?  Well, you’ve been doing OK so far, I think you can go on without it.

Identifying which of your needs are false ( and simply wants in disguise ) will save you a ton of money and get you back on the right track.  Not only that, it’ll help keep you from accumulating a bunch of clutter that you really don’t need.  Always ask at least the one question – "Can I live without it?"