• 4 Pocket Allowance

Ready for the Real World - Needs vs. Wants

Updated: Aug 4, 2019

I don’t know how many times I have been shopping with my children and we have come across at item they “really need.” The things that they “need” generally range from an expensive toy, a cheap toy or candy. It takes me twice as long to get out of a store as I am subjected to various reasons why they “need” whatever item they have come across. As most parents know, this can give you quite the headache. It is an important financial lesson to know the difference between what a need is and what a want is. This is a lesson that even adults still struggle with. But when they really understand this concept, they can make better financial decision in their life.

So how do we teach children what the difference between a need and a want? We first start out with a simple discussion. Ask your children what we need to survive. We need shelter, food and warm clothing to keep us safe. Then ask about things that we want. They may say that they need their video games, but then ask them if they could survive without it. Does it impact them from being safe and healthy? Keep this going as an open dialogue. You can bring it up when shopping, car rides to and from activities or as a great dinner table discussion.

Another great activity to incorporate this concept is by having pictures of things that they want and things they need. Ask them to cut out pictures from a magazine and place them into either the needs category or the wants category. This is a great way to continue discussion about what constitutes why we need to spend money on the things we need first and what we really don’t need to spend money on. A way to even dive a bit deeper into the subject is when you are grocery shopping talk about the things that you need verses the things that you want. Food is necessary to survive but cookies are a treat that we don’t necessarily need.

A great way to also teach this lesson is to be a good role model of it. Don’t indulge yourself or even them often with things that they or you may want. If there is something that you really want, show them how you are saving for it. Do the same for them. For big ticket items that they want to have, set that as a goal for them and have them earn the money to purchase it. Try to hold back on these big items for holiday or birthday presents. When they earn something themselves, they appreciate it a whole lot more.

Ready for the Real World - Needs vs. Wants, Ideas for parents about allowances and teaching kids about money and financial literacy, #4PocketAllowance

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