Most of us know that you're supposed to plan for the future by saving money and/or investing it. However, this is something that we tend to put off because there are so many demands in the present. One good way of saving money is to learn to distinguish between necessities, comforts, and luxuries.
The Difference Between Necessities, Comforts, and Luxuries
The fact is that most of us don't know how to distinguish between necessities, comforts, and luxuries. Necessities are the things that you absolutely need. If you didn't have these things, you wouldn't be able to live. Usually, they include food, clothing, and shelter.
However, all kinds of food, clothing, and shelter wouldn't fall under the term "necessity." This is because you need food to live, but you don't necessarily need the food from an expensive restaurant to live. Similarly, you need to shelter your body from the elements, but you don't need designer clothes to do this. And, obviously, you need a place to live, but that place doesn't need to be a mansion. It just needs to be big enough for your needs.
So if you divide all the things that you could possibly acquire into necessities, comforts, and luxuries, necessities fall on the lower end of the spectrum and luxuries fall on the upper end of the spectrum. Comforts are somewhere in the middle.
It's a good idea to make sure that all your necessities are met and maybe even some comforts. But it's probably not a good idea to buy designer clothes and eat at the fanciest restaurants in town unless you are absolutely sure that it will be covered by your finances. This will help you to save money and invest it as well so that you never run out of money in the future.
Dividing Your Expenses Into Necessities, Comforts, and Luxuries
It's a good idea to sit down and think about all the things you have recently spent money on. Did you do some online shopping, order some groceries, buy some medicines, get a few coffees? These are some of the things that people tend to spend money on. Additionally, they might go out drinking with friends, buy toiletries, pay their rent, pay domestic help, pay gym fees, take public transport, spend money on gas, etc.
So you need to sit down and think about which of these things you really needed and which were extraneous. Of course, everyone needs groceries and medication. But did you really need that red dress and those two tank tops? Maybe they were comforts rather than necessities. The same goes for all those fancy coffees and going out with friends. These are comforts rather than necessities.
If you're in the habit of buying expensive perfumes, however, those might fall under the category of luxuries rather than necessities or comforts. Gym fees are fine, of course, unless you've stopped going to the gym, in which case they become luxuries. Transportation is also a necessity.
Cover All Your Necessities
The point of the above exercise is not to get rid of all the extraneous items that you are spending money on. If you only bought necessities, life might become really dreary, and you might start to feel unmotivated. But the idea is to keep your finances in check by buying all your necessities and just a few comforts. Once in a while, you might even throw in a luxury or two, if you can really afford it.
By living in this moderate kind of manner, you'll keep yourself feeling good and avoid that feeling of deprivation you would get if you only bought your necessities. At the same time, you will still have some money left over to put aside for your future.