You can always make adjustments to your budgeting categories later. Decide which category each of your household expenses fits in best and go with that. A basic, dependable car like a Honda or Toyota could be considered a need, while a luxury car like a Mercedes-Benz or Jaguar could be considered a want.ĭon’t get too hung up on these kinds of distinctions, though. Unless you live in a big city where you can reasonably get around via public transportation, you probably need some kind of vehicle. The former would be considered a need while the latter would be considered a want.Ĭars are another example. But there’s clearly a big difference between buying basic clothes and frequently purchased designer clothing at a high-end boutique. While these expense categories may seem cut-and-dried, there are some expenses that can bleed over from one category to another. It may also include debt repayment (other than a home mortgage, which should be considered housing and included in the needs category). This includes savings to meet both short- and long-term goals.
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