It's disappointing that I even have to post this, but I hear confusion between these two words every week. When I help people out with their finances and we get to the point where they tell me they can't save anything because all of their money goes to "essentials"; we have to have this discussion.
By definition, a need is something that you have to have in order to live. Food, water, clothing, shelter, and safety are all needs, but we'll see that in modern society there are large variations within these. Wants are things that just flat out make you feel good, but otherwise do not keep you alive and can actually hinder that pursuit.
Here's a great conversation I had...
Friend: I have so many essential bills in my life I can't get ahead. For instance, now I need to go fill up my boat and that's going to be like $100 in gas! Why is gas so freaking expensive??
Me: Whoa truck, back up! You don't NEED to do that because you shouldn't have a fucking boat! Sell that bitch! Then it won't need gas, along with insurance and maintenance.
Notice the thought process. It was somebody else's fault that gas was too high and he couldn't get ahead, rather than his fault for owning something that he should rent, and only if he has the money to do so.
If you are deeply in debt or not on track for having enough for retirement. Then there should be no wants in your life because you can't afford to have them! The needs also have to be reevaluated. You need food, but that doesn't include dinner at Delmonico's in NYC. You also need shelter, but a 4,000 square foot house just makes you house poor. A Louis Vuitton bag is not necessary clothing. Get the idea?
Here's a couple of wants that people get very confused by. Cable is not a need, especially not the $200 a month sports package. Neither is AC when it's set on 72 degrees. You do not need 2 cars when only one of you has a job or can use public transportation/bike to get to that job. You will however, need a bike for the grocery store. Goodwill sells clothes, so you don't NEED to go shopping. You need water, but not bottled water and definitely not Starbuck's. I would consider a cellphone a necessity in today's modern world, but not a $100 smartphone plan.
Mowing your lawn is also a necessity. Not because you'll die if you don't, but because the city will fine you if you don't. With that said having a lawn service is a want. Go get a new push mower (guaranteed to start) for under $200 and do it yourself. It'll pay for itself in a few months vs paying somebody to do it! Plus your wife will now think you actually do something around the house other than play video games. You might even get laid from the weight you'll lose.
Health insurance, among many other types of insurance, is a need, not a want in modern society. Saving for your child's college education is a want, not a need.