The Right Way to Spend Money

We always say you should save your money whenever you get it, but we admit there are times when you have to spend some of it.

For instance, if you have to buy something you need, like lunch or a warm coat when the weather gets cold. Other times it might be something that you want, like an iPod or a video game. If you want to know when to save and when to spend, it’s helpful to know the difference between needs and wants.

• Need = something you can’t live without.
• Want = something you’d like to have, but can live without.

Now it’s your turn
Write a list of things that you need to survive (seriously, you’ll survive if you don’t get a new camera), and things you’d like to have (do you really want to go without deodorant?).

Get the idea? Keep saving your money and don’t spend it all on things you want. Over time you’ll see that when you save, you’ll always have the money for the things you need the most.