Can you see how your needs change over time based on your goals?.

AT THE END OF THIS LESSON, YOU WILL BE ABLE TO:

1. Explain the difference between needs and wants
2. Identify your needs and wants and match them to your goals
3. Plan goals and record them.
4. Understand the costs of educating your children
5. Identify ways to achieve financial goals

Many things can derail you from achieving your goals. Let’s look at how
you currently spend your money and how you could achieve your goals
quicker.

NEEDS AND WANTS.

Themba asks Sophie if her expenses are based on mostly needs or wants.
Sophie is unsure because she doesn’t really know what a need or a want is.
Let’s have a look at the difference between wants and needs.
Look at the visuals below and write the word want or need below the icon,

based on your personal view.

Now, let’s define what a want and a need is

Needs are important things in life that you need every day to survive.
Some examples are:

• Water
• Shelter
• Food
• Clothing
• Education
  A want is a desire for something which may not be necessary but may
  make your life easier or better. Some examples are:
• Tickets to a sporting match, e.g. the Soccer Derby
• Designer label/branded clothing e.g. Levi jeans or Polo shirts
• A tablet or smartphone
• Convenience foods.

Sophie listened to what Themba said about needs and wants. She
mentions that she spends a lot of money on convenience foods because
she gets home late. Themba says that they will look at exactly what she
spends when they do her budget, but she can probably plan a bit better
and save that money.

Write down some of your expenses. Are they needs or wants?

Themba smiles. He has heard this many times before and tells Sophie not
to worry, she can start today. Themba asks her what she thinks she needs
to do. Sophie starts to make a list.
On her list she writes:

• Look at what I spend my money on
• Decide if I need to spend my money on that
• Research what it costs to get married
• Find out what the cost is to complete my matric part-time
• Find out what it costs to buy a house.
• See where I can save more without sacrificing all my children’s fun stuff
  Themba is impressed. He tells Sophie she has taken the first step to
  achieve her goals by listing them and writing down what she needs to
  achieve them.
  As you can see from Sophie’s list, she needs to gather a lot of information
  in order to plan properly for her goals. It is very important that you know
  exactly what you need to do to reach your goals. This will make it easier to
  plan and achieve them.
  You also need to reflect on your goals. As your life changes, some goals
  may not be as important as they used to be. In that case you might need to
  update them. It is important that you do this often so that your goals
  remain relevant.
  Themba looks at Sophie’s goals again and sees she wants to finish school.
  He asks her why that is one of her goals. She says that education is
  important because it could change her life. Themba agrees and asks her
  about her children and their education and whether she’s thought about
  it.