Maslow’s Hierarchy Of Needs And Frugality
Maslow’s Hierarchy Of Needs is a theory in psychology conceived by Abraham Maslow in 1943. The theory first appeared in his paper A Theory of Human Motivation. Maslow’s Hierarchy Of Needs is typically represented as a pyramid consisting of five levels — i.e., physiological, safety, love/belonging, esteem, self-actualization as the one shown below.
Image from Wikipedia
Maslow’s Hierarchy Of Needs As A Framework For Frugality
The topic of wants versus needs comes up often when we discuss frugality. However, there’s a lot of gray areas and differences in opinion on this subject. After I thought about this for a while, I recall something I learned in Biology called Maslow’s Hierarchy Of Needs which does a good job of clearly explaining “needs“.
Needs: Physiological and Safety Needs
The first two levels of the theory is a good definition of needs in the context of frugality. At this most fundamental level, we are looking to fulfill our physiological needs. If you need to save as much money as possible and practice frugality, this is the level where you should operate. Your primary focus is on fulfilling the basic human needs — such as, food, warmth, water, and other bodily needs.
The next level is also considered frugal and in the realm of needs. Safety needs is the desire for:
- Personal security
- Financial security
- Health and well-being
- Safety net against accidents, illness, and other adverse impacts
Many of these safety needs can be addressed by personal finance risk management techniques.
The comparison is clean and simple with respect to the first two levels: anything that falls within the physiological and safety needs are considered frugal. However, you should note that you could over-fulfill these needs and turn them into wants. For example, a basic home cook meal fulfills your need for food, but a fancy Filet Mignon and Shrimps dinner goes beyond your basic needs.
Other Levels: Love/Belonging, Esteem and Self-Actualization
Although next three levels of the Maslow’s Hierarchy Of Needs do not cleanly align to “needs” or “wants”, I would like to include them here for completeness and make a few observations. These levels include:
- Love/Belonging – The need to be loved and belong.
- Esteem – The need to be respected, to have self-esteem, self-respect, and to respect others.
- Self-Actualization – The need for achievement.
Some observations:
- You could be frugal and fulfill all of these needs.
- You could spend a lot of money and never fulfill any of these.
- By overspending money on “wants” and not addressing your physiological and safety needs, you could jeopardize the fulfillment of love/belonging, esteem, and self-actualization needs.
Other articles about Maslow’s Theory Of Needs:
- Combining Maslow’s Hierarchy of Needs & Personal Finance at My Money Blog
- How Maslow Can Help Your Online Business at Men with Pens
This article was featured in:
- The 142nd Festival Of Frugality at Frugal Babe
Read more about
saving money, Maslow, abraham maslow, theory of human motivation, maslow s hierarchy of needs, frugal, self actualization, needRecommended articles
All posts by Pinyo
Please share your comment:
Comment Rules: Constructive criticism is welcomed. Please use your PERSONAL name or initials and not your business name or URL, as the latter comes off like spam and I'll most likely delete your comment. Have fun and thanks for adding to the conversation! Here's our comment policy and guidelines.
2 blogs that link to this article:
If your trackback does not show in 24 hours, please resend to this trackback URI.
Free Q&A Service
Best Bank Rates
| High Interest Savings Accounts | 1.51% |
| High Yield CDs (1-year) | 1.75% |
| High Yield Checking Accounts | 1.46% |
Best Credit Cards
| Best Credit Card | TrueEarnings® |
| 0% APR Balance Transfer | 6 mo |
| Lowest Interest Rate | 9.75% |
| Best Cash Back Reward | 5% |
Your Credit Score
- Free Credit Report and Credit Score Online Sites Comparison
- What is a Good Credit Score?
- Get Your Free Credit Score from Credit Karma
- How To Improve Your Credit Score
Featured Reviews
- Google Finance Review, Finance and business news portal
- TradeKing Review, Online Discount Stocks and Options Broker
- INO TV Free Review, Online Video Learning Platform For Traders
- PopTop Ranks Review, Directory of top sites listed by popularity
Featured Articles
- Best Online Discount Brokers For Active Traders
- Best Investment Brokerage For Mutual Fund Investing
- How To Find The Best Mortgage Rates
- 2009 Tax Tables, IRS Federal Income Tax Rates And Tax Brackets
Recent Articles
- Rent-to-Own: Consider Saving Up Instead
- New Car Buying Tips: How To Get The Best Deal On A New Car
- How to Have a No-Spend Weekend
- An Introduction to Mutual Fund Fees
- 25 Best iPhone Apps for Personal Finance
- Best Online High Interest Savings Account Rates, February 2010
- Tax Tips for 2009 Tax Year
- How to Make a Multi Family Household Work
- Investing and Uncertainty: A Perspective On Current Economic Policy
- Where to Buy Cheap Eyeglasses Online
Affiliate Relationships
As required by FTC regulations, please note that we have a financial relationship with many of the companies mentioned on this site. We occasionally review products or services that we have been given access to for free. However, we do not accept compensation in any form in exchange for positive reviews and the reviews found on this site represent the opinions of the author.Important Notice:
The information found on Moolanomy is provided and intended for informational and entertainment purposes only and does not constitute financial, legal, or other advice of any kind. The information contained on this site is aimed at a general audience, and does not attempt to offer specific advice to your specific circumstances. If you are looking for professional advice, you should consult with an independent financial adviser.This site contains information about third party products and services, such as credit card offers, online banking, discount brokers, and credit score services. While we endeavor to ensure that the information presented on this site is accurate at the time of publication, any offers and rates shown on Moolanomy can and do change without notice. Visit the official site of the offer for up-to-date information.
For additional information, please review our Terms and Conditions.
Archives By Year
2007, 2008, and 2009Additional Resources
- CheapLoans.co.uk - A simple way to find cheap loans. For a hassle free quotation, apply now!
- Mortgage Refinance - FHA lender offers fixed rate mortgage refinance loans for consolidating adjustable rate debt and loans, getting cash back and financing a new home remodel.
Great article, Pinyo.
Even those who pratice admirable frugality tend to focus a significant portion of their spending on the fulfillment of the Love and Esteem levels. Our need for food is fulfilled with UN rice rations, shelter is met by the most rudimentary of structures. As soon as we move beyond true necessities, we are in the realm of the relative luxuries that occupy the top of the hierarchy. We choose diverse foods not because they fulfill a need, but because they fulfill a “want” and aid in our self esteem and acceptance. The same goes for the reason we buy houses that are more than shacks, that we decorate, that we wear anthing more than basic clothing.
The needs vs. wants debate is full of grey areas- Maslow’s hierarchy helps illustrate the lines that are drawn. An sculpting class can be a need, it’s just a need a the highest levels.
You were looking to write more home run quality articles? I think you just wrote one.
This is an excellent conceptual connection. I was especially struck by the realization that many of us use spending to try to satisfy those upper three levels and how quixotic that really is.
Need vs want is always an interesting question. How much do we all need, anyway? When I think about people in other countries, the answer to that question is, a lot less than we “get by” with right now.
God Bless America!
Great article, stumbling.
Coincidentally, I was listening to an audio CD during my commute this morning on microeconomics. The theme of today’s lecture was built around this fundamental economic concept: consumer purchasing decisions are primarily based on self-interest.
A simple concept no doubt but one that cannot be overlooked.
This is one of the best posts I have read. I like the way you make the connection to frugality. I think it is so easy to forget what really matters in life (and with our finances) that it is equally easy to get lost in all the “noise” with which we get bombarded every day. Once you are lost, it is easy to get into trouble.
Hey – I studied this theory last year when sitting for my PMP exam, never thought to apply to the world of pf. You’ve done a great adaptation.
@MoneyGrubbingLawyer — Thank you. You comment also further illustrate the point.
@Tracey — Thank you. I don’t know about home run quality, it’s hard to judge my own work. I can usually tell when I did a lousy job, but not the other way around. By the way, I had to look up what “quixotic” meant — another new word for me.
@Greener Pastures — Great point about looking outward; especially at other culture to understand wants versus needs. I saw a show about folks in Tibet last night and they have far less than we do, yet they appear to be super content with their lives.
@Andy — Now I am curious…how does Maslow’s theory relate to Project Management?
I was pleased to see you say that you can be frugal and achieve the 3 highest tiers on Maslow’s hierarchy. In fact, for me, I believe that my choice to work less (and be frugal) is helping facilitate those higher levels, especially the creativity piece as part of self-actualization. Thanks for the food for thought ….
Many are having to figure out what they “NEED” versus what they “WANT” in today’s economy. What are considered needs today are very often what were wants yesterday. The list of material things that we become attached to never ends. Do we NEED a PC or a TV or a car? It’s relative.
Hey – I studied this theory last year when sitting for my PMP exam, never thought to apply to the world of pf
I had no idea there are exams for this sort of thing.
This is the biggest trouble people have today is dciphering what is a need versus what is a want. Maybe if more people read and really took in Maslow’s theory people would act differently? I am going through this current struggle with several individuals in my life. I should probably show them the chart, but they will get quite mad!