0:01 Hey guys, my name's Daniel from Financial Literacy Australia, and today, we're going to discuss the differences between needs and wants. Have you ever wondered the difference between what you need and want?

0:14 So, in the hustle and bustle of everyday life, the distinctions often blur, but today, we'll delve into this subject: imagine a boy named Timmy.

0:24 Timmy has just received his first allowance. His eyes gleam with joy as he glazes into the ten coins in his hand. His mind races with possibilities: Lolis, toys, or perhaps the video game he's been eyeing for weeks, But then he remembers his worn-out shoes. He needs new shoes, but he also wants the video game

0:47 We see our first dilemma: the battle between needs and wants. As the term suggests, we must possess things to survive, such as food, A house, clothing, electricity, and, in Timmy's case, a new pair of shoes. Wants, on the other hand, are desires. They enhance our lives, bringing

1:10 gives us joy and comfort, but they aren't necessary for survival, and the video game falls into this category. Recognising the difference between needs and wants is crucial.

1:23 It aids in knowing our expenses and ensuring that we have ample resources for these essentials. So that could be, as I said before, food, electricity, housing.

1:35 So how can we distinguish between these two things? A simple question can help: can I live without this? And if the answer is a firm yes, then it's a want, not a need.

1:49 A practical approach to this is creating a list dividing your purchases into needs and wants. This aid can assist you in understanding the difference.

2:00 Planning your expenses accordingly. Now let's go back to Timmy. He decides he wants to spend his allowance on his new shoes.

2:11 Now, once he's addressed his needs, he can contemplate what to do with a big holiday or gaming console.

2:35 Saving his allowance might eventually allow Timmy to purchase that video game he wants. Now it's time for an activity. Imagine you've just received your allowance in your bank.

2:48 How would you categorise your planned purchases? What are your needs, and what are your wants? And how can you strategise spending to meet your needs and satisfy some of your wants?

3:04 to wrap up, it's normal to want things. Everyone does. And it's a desire to add some colour to our life. It's essential to meet our needs first, though. Making wise decisions about our resources ensures that we care for ourselves and our loved ones.

3:19 Like young Timmy, understanding the balance between needs and wants can lead to a more fulfilling and secure life.

3:27 Thanks, everyone.