When making these decisions, it is best to start sorting out your needs first. There are two main categories of needs, absolute necessities and near necessities. Absolute necessities are things that are important for our basic survival:

• Food
• Clothing
• Shelter

Near necessities aren’t essential for survival, but are quite important to function in society. Some of these items are offered to students living on campus, but for those off campus these items are much more important than buying DVDs or a big screen TV.

• Reliable Transportation
• Insurance Coverage
• Utilities
• Cell Phone
• Personal Care Expenses

Just about everything else you can think of falls under the category of want. Some considerations to make when defining your wants would be to prioritize the necessities listed above and make sure you live within your means. For example, food is a necessity but always going out to eat or buying loads of junk food is not necessary for daily living. A cell-phone is a near necessity, but do you need a smartphone? Initially, you may think both are needs, however, identifying these types of items is an aspect of financial literacy.

Also, within certain categories there is usually room to make less expensive purchases. With the food example, instead of ordering pizza you could buy frozen pizza, which will probably be half the price.

Following these suggestions can help you cut costs and live within your means instead of buying unnecessary items that may put you in a financial hole in the future. These suggestions can help you make better decisions throughout your life.