By Jo & Carl Violetta
Want to help your kids build money management skills?
An important first step is teaching them the difference between ‘needs’ and ‘wants’.
Teaching kids about needs and wants is important in building their financial literacy. When children understand that some things are essential for survival and others are not, they are better equipped to make informed decisions about how to spend their money.
Let’s explore some tips and tricks you can use to teach your kids about needs vs. wants.
Defining Needs and Wants
First, let’s get clear on the meaning of the terms ‘needs’ and ‘wants’.
Needs are things that are necessary for survival and well-being, such as food, shelter, and clothing.
Wants are nice to have, but aren’t necessary for survival or well-being, such as toys, gadgets, and snacks.
Teaching Kids the Difference
Here are some fun and easy ways to teach kids the difference between needs and wants:
Use Real-Life Examples
Point out the difference between needs and wants in everyday situations. For example, when choosing clothing, explain that a warm coat is a need, while a designer shirt is a want.
Create a Wants vs. Needs List
Create a list of items and ask your child to categorise them as wants or needs. This can be done using a whiteboard or a piece of paper.
Play a Game
Play a game where you list items and ask your child if it’s a need or a want. For example, ask if a bed is a need or a want. This will help your child to understand that some things are essential for survival while others are not.
Teach your child that values should determine wants and needs. For example, if your family values education, buying books and school supplies is a need, while buying the latest toy is a want.
Use a Chart
Use a chart to visually show the difference between wants and needs. You can do this by drawing a line down the centre of a piece of paper and labelling one side as “Wants” and the other side as “Needs”. Then, have your child cut out pictures from magazines or advertisements and place them on the appropriate side.
Teaching your kids the difference between needs and wants is essential in building their financial literacy and helping them manage money better. Financial literacy is a vital skill for children to learn, as it sets them up for success in adulthood. It helps them to understand how to budget, save, and invest their money wisely. By teaching kids the difference between needs and wants, you’re laying the foundation for future financial success.
Jo and Carl Violeta are self-confessed numbers nerds, parents of an energetic toddler and a super switched-on teenager, and co-founders of the award-winning business, Violeta Finance. They are a husband and wife team who are passionate about empowering their community with financial education, love the odd glass of wine, and get a kick out of helping families achieve their homeownership and financial dreams.