Question

categorize each of the following expenses as a need, want or savings.
paying your electric bill
adding money to your retirement account
adding money to your emergency fund
going out to dinner with a friend
subscribing to a video streaming service
paying for a doctors visit
taking a vacation during summer break
paying for transportation to and from your job
paying your apartment rent
buying a coffee on your way to school

Explanation:

• Paying your electric bill: Electricity is essential for daily living (lighting, powering appliances etc.), so it's a need.
• Adding money to your retirement account: Retirement savings are for future financial security, so it's savings.
• Adding money to your emergency fund: Emergency funds are set - aside for unforeseen events (like job loss, medical emergencies not covered by insurance etc.), so it's savings.
• Going out to dinner with a friend: While food is a need, dining out is more of a social and discretionary activity (you could eat at home more cheaply), so it's a want.
• Subscribing to a video streaming service: There are free forms of entertainment (like public libraries for DVDs, free - to - air TV), so this is a want.
• Paying for a doctors visit: Healthcare is necessary for maintaining health, so it's a need.
• Taking a vacation during summer break: Vacations are discretionary (you can choose to stay at home and have a “staycation”), so it's a want.
• Paying for transportation to and from your job: If your job is necessary for income (to meet other needs like food, housing), then commuting is a need.
• Paying your apartment rent: Housing is a basic need (protection from the elements, a place to live), so it's a need.
• Buying a coffee on your way to school: Coffee is not a necessary part of a basic diet (you can drink water or cheaper beverages like tap water or home - brewed tea/coffee), so it's a want.

Answer:

• Paying your electric bill: Need
• Adding money to your retirement account: Savings
• Adding money to your emergency fund: Savings
• Going out to dinner with a friend: Want
• Subscribing to a video streaming service: Want
• Paying for a doctors visit: Need
• Taking a vacation during summer break: Want
• Paying for transportation to and from your job: Need
• Paying your apartment rent: Need
• Buying a coffee on your way to school: Want