Distinguish between needs and wants. One of the most basic concepts of economics is want
vs. need. A need is something you have to have, something you cannot do without. A good
example is food.

 

A want is something you would like to have. It is not necessary, but it would be a good thing to have. A good example is music. Not understanding the difference and
believing that a “want” is actually a “need” can be both expensive and time consuming.

Use table to the right to determine your current expenses. This will help you determine the amount of money left at the end of each month and what kind of mortgage payment can you comfortably fit into your lifestyle.