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The Collegian

The Student News Site of Tarrant County College

The Collegian

The Student News Site of Tarrant County College

The Collegian

Knowing needs, wants can help in money management, lead to success, adviser says

By Khanh Nguyen/reporter

Distinguishing between needs and wants now will pay off in the future, financial adviser Nancy VanBoskirk told SE students Dec. 1.

VanBoskirk, who recently helped her own children buy their first home, became a financial literacy consultant when she realized how little people are educated on finances as a nation.

She didn’t like the fact that many students had to drop out of school because of the debts they accumulated.

Therefore, she concluded SE Campus’ three-session workshop on money management with a discussion and exercise on prioritizing spending.

“Buying for needs outranks any other priorities,” she said. “Not satisfying a physical or psychological need can cause harm.”

Needs are essential to one’s survival, VanBoskirk said. They can be physical, like food and shelter, or psychological, like friendships and a peaceful state of mind.

Everyone has the same basic needs, she said, but there are different degrees in which they are necessary depending on the individual’s lifestyle.

Meanwhile, lifestyles can change and, therefore, so do needs.

College students living at home may only need to worry about paying for school and lunch today, but in the future, they will have to provide for not only themselves but their own families and buy their own homes.

Different careers warrant different needs, VanBoskirk said. A mountain man would require heavy jackets, boots and gear for his job compared to someone working in corporate. However, essentially both need to acquire the appropriate uniforms.

The world also changes. Are mobile phones considered a need, an essential for one to survive? Ten years ago, they might not have been, but today, they help greatly in connecting with loved ones and in a highly competitive and technology-driven business world.

The same holds true for cars a century ago and any other innovation. VanBoskirk notes that these high-conception essentials may tread into what is considered a “want.”

“Wants are more social, emotional desires but not necessary for survival,” she said. “They are ‘nice-to-haves,’ ‘luxuries of life’ and are associated with convenience and comfort.”

Take mobile phones and cars, for instance. They are needs that provide basic functions like communication and travel. However, they can become wants when paying more gives the consumer extra features like more text messages and a fancy model like a Ferrari, respectively. Contemplating if the latter is worth it in the long run is something financial advisers encourage people to do.

VanBoskirk wants students to ask themselves, “How long would the satisfaction last?” What are the immediate consequences and trade-offs? She introduced the concept of opportunity cost, the real or implied cost of what is given up to get or do something else.

“Opportunity costs add to the price of the choice you make,” she said.

For example, a boy might choose to go see a two-hour movie instead of working a couple extra hours when given the opportunity. In addition to spending $10 for the ticket, he missed the chance to earn $20 (assuming he makes $10 an hour), so he actually lost $30. The movie might not have been good and could have been seen any other time, but in that moment, it was chosen over work.

If nothing else, VanBoskirk wanted students to pay attention to opportunity cost. Students shouldn’t borrow for wants, but save for them, she said. Impulse desires may go away after a few days, she said.

“Taking time to save lets you reassess how much you desire something,” she said. “Instituting a discipline in our lives leads to greater savings, even if it’s $10 a month.”

When the audience was asked about some opportunity costs that presented themselves, a student said she did not participate in Black Friday.

VanBoskirk agreed that not spending money is the best way to save money, literally.

“Don’t buy just because something seems like a good deal,” she said.

The audience was also asked to participate in a card game in which they had to distinguish between needs and wants.

Anthony Muokwue, a nursing major, drew “evening gown” and concluded it was a want.

“After the seminar, I understood the differences between wants and needs and how people interchange them,” he said. “Knowing what is a need can help in money management and also lead to success in life.”

Mania Asgari decided that the different types of shirts that appeared on her card — “T-shirt, blouse and polo” — are ultimately needs because they each serve a different purpose and are necessary for at-home comfort or professional attire for work.

Asgari also thought it was a good idea for a presentation because “young people don’t understand money management.”

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