The first lesson – and one of the very few things I learnt that I still remember – from my Microeconomics first year class is the notion of scarcity.
Scarcity from Wikipedia is the fundamental economic problem of having seemingly unlimited human wants in a world of limited resources.
This means that no matter how much the country or your local community grow wealth there will never be enough to satisfy everyone’s wants.
However, the key word here is ‘want’. Our wants or lifestyle choices may be unlimited, but our needs or necessities are limited (to a certain extent). And the difference? From the Economics perspective it is the things that you cannot survive without,
but in practice the difference is harder to articulate as it depends on a person and how they choose their values and life.
For example, we know that food is a need that we cannot leave without it, but is buying a known expensive brand for example a Mercedes Benz versus a more affordably
Toyota a necessity or a lifestyle choice? The next person might ask do you even need your own car or you can use public transport? I can go-on-and-on but there is no one
universal correct answer and this differs for each person.
The trick is to be able to classify your own personal expenses against your unique circumstances into needs and lifestyle choices - not to try copy another person
or taking advice with blind faith. After all these are the things that makes us unique and true to our life's purpose. Whichever way you classify your needs or wants, one things that is almost always true is that we cannot get everything we want. To get what we really want –
and feel really fulfilled – we can do a bit better by applying this very basic Economics 101 lesson into our daily lives.