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These days it's ridiculously difficult to clearly define what you need to buy vs. what you want to buy. From all sides, there is a deafening thunderstorm of friends, life-partners, children and family members explaining in varying degrees of talking, shouting and screaming exactly how you should be spending your money.

There is the latest piece of technology that all of your friends have, new phone plans that you should really invest in, a night out at a moderately priced bar that wasn't so moderate, toys and toys that never get used for your kids and a new part that your car desperately needs

Heaven help us, how is anyone supposed to make head or tail of what can otherwise be termed as "a chronic nauseating endless head-ache of costs and expenses?"

Well, to our great relief, it's really not so bad. If you can succeed in drowning out the drone of advertising, demands and suggestions offered by everyone else, you can effectively prioritize where to invest your earnings.

Lets walk through 5 ways to identify if you really need something or if you just want it:

1. Does this keep me alive?
Shelter, heat, water, food and clothing are your basic five. That roughly translates in today's language as rent, electricity, gas and water bills. Food and clothing are tricky ones, because there are restaurants and designer clothes vs. simpler alternatives.

2. Can I do anything else if I don't have this?
Certain items enable you to be productive in other parts of life, and if they're not working, everything else comes to a stop. For those people who live far away from where they work, this means their car. For people who work from home, this might mean their computer. Again, this can get tricky when you start believing that you need the most advanced tool in order to go forward, but like food and clothing, you usually only need something simple in order to succeed.

3. Will this help me achieve my goals and advance?
Don't think for a second that advancement is not a need. In order to survive and compete in an ever changing world, you need to constantly re-evaluate yourself and acquire new skills. A volatile market might lead to you needing a new career, so you always need to have something up your sleeve.

4. Am I saving something?
The rainy day will eventually come, and when it does, you'll need something saved up.

5. Can the people close to me survive without this?
Of all the questions, this is the hardest. When you're single and without children, everything is quite simple. You cover your own way and worst comes to worst, you suffer a bad month of $2 rice and vegetables. But when you're in a serious relationship, are married or have kids, things get complicated quickly. Diapers, presents, kitchen appliances and knick-knacks are only the tip of the ice-burg. Truthfully, most things here fall into the "want" category, but make others happy. Even though this is important, it's usually not a need, so be careful about the first 4.

Balancing your expenses is tricky business. It's sometimes confusing and always important. But if you can prioritize where your money needs to go today, you'll find that you can spend it where you want to tomorrow.

Learn more about this author, Ben Grunfeld.
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