The answer depends on your own life stage. When you are in the start up stage, you spend for your needs and save as much as you can. When you are in your build up stage and you already have some passive income or if you are in the fine-tuning/asset allocation stage, you can already think of the following: Can my passive income cover my particular wants? If I use some of my passive income for my wants, I will have to give up the interest that will be generated by my passive income. Can I realistically recover the additional passive income lost to maintain my financial plan?
When you reach your retirement stage, all your income will be passive income. it is now just a matter of allocating your monthly passive income to your needs in order to decide if you can afford your wants.
Our needs are basically the same because we have similar physical characteristic. But because of the environment we grew up in, we may have different views of what are our needs and wants. Only you can fully understand you needs and wants.