Spend what you really, really want - but first know what you need

Knowing what you need versus what you want is a key step in working out how to spend your precious time and money.

A MATE of mine has a $3500 kayak.

I didn’t realise that a kayak could cost that much.

Apparently, it’s all to do with the design, the quality, the deluxe padded seat and — wait for it — the foot pedals. Yes, today’s top kayaks have foot pedals to allow your legs to do the work while your hands hold a fishing rod, a camera, or maybe a beer.

In fact, you can now spend a lazy $6600 on a new kayak with all the bells and whistles.

After joking about my mate spending big money on a glorified paddle boat, we started talking about needs versus wants, and quickly realised that more than 90 per cent of everything people buy is a want, not a need.

As we head into the year’s craziest fortnight for spending money, it’s worth taking stock. Needs are food, clothes and shelter, and enough stuff to stay healthy, but not much else.

Wants will always differ dramatically from person to person. Whether it’s breakfast cereals, brand-name clothing or boats, nobody should feel guilty about spending money on something they want.

If the needs are covered, go for it and enjoy.

MORE: 10 ways to trim your holiday travel costs

The Spice Girls asked what you really, really want? It’s a good idea to know the answer.

The key is to know what you want, and also what you really really want. Just like the Spice Girls asked.

Before Christmas, consumers are bombarded with messages to buy stuff for themselves, children and other family members that they don’t really want.

Think stocking fillers. Isn’t that just a trick term to buy a bunch of cheap junk that kids will never play with?

Then there’s the popular buy one, get one free deal. But if you don’t really want the free item, is it worth it?

Smart shoppers use a few strategies to make sure their money is wisely spent on things they want. They will:

• Always shop with a list, which lowers the risk of impulse buying.

• Ask themselves again if they really want the item, before they take it to the cash register.

• Know if they’re buying the best deal. Researching this has never been easier thanks to the internet.

• Be prepared to ask for a discount, or at least if the retailer will price match.

Wants become dangerous if we go into debt to pay for them, and have no plan to get out of that debt before painful interest charges hit.

If you can afford your wants and are happy with your spending, ignore anybody who says you’re wasting your money.

The main purpose of money is to create rich experiences rather than have riches locked away in a safe. If you can do both, even better.

If instead, you feel like your finances are sinking, it’s probably a sign that too much money is being spent on wants. Professional financial advisers or free financial counsellors may be able to help get back on track.

Remember that there’s nothing wrong with wanting stuff.

My mate loves his expensive kayak. Good on him. I’ve also been known to splurge a bit on boats — all in the name of financial research, of course.

@keanemoney