Needs are the basic necessities of life without which we cannot live. Food, shelter and clothes are the most basic needs of human beings. Apart from that, health care, transportation and education have also become an integral part of our lives. Needs are pretty much standard for every human being. We all have the same needs.
Wants are those extra things that "may" improve the quality of life but without which life does not come to a halt. They are the tools of indulgence. Going on a vacation, wearing expensive clothes, eating out, collecting new gadgets, etc are things that are beyond the needs. They vary from person to person. I may like to buy new gadgets but to you, it may seem totally wasteful. You may like to go on expensive vacations while your friends may think you are crazy.
Being too obsessed with wants will result in too much time and money being spent on things you don't really need. It is important to prioritise your wants and keep an eye on how much you normally spend on things that could be avoided.
I am not suggesting you to live only by fulfilling your needs. Fulfilling your wants gives you satisfaction and happiness. It's not about totally avoiding your wants. It's about having a balanced lifestyle- a balance between your needs and wants and understanding which of your wants are wasteful and which of them truly enhances your life.