One of the most important things we can teach our kids – whatever their age – is to recognize the difference between a “want” and a “need.” Mastering this one simple concept can have a profound impact on future financial health. Additionally, it’s not enough to simply recognize the difference; it’s important to be unashamed to call a thing what it is. “I don’t want to buy that, but I really need it.” “This is the coolest thing ever! I really want this for Christmas!”
Teaching Kids About Wants vs Needs
There’s nothing wrong with wanting something – it’s natural to have dreams and plans. It’s also very natural to want some things that you’ll never have. It’s fun to talk about hopes and dreams, and to understand that most of those may never come to pass. Kids need to know this.
It’s also important to recognize (and be unashamed) that there are some things that you simply need in life — and that some of them are needed right now! Just as it’s irresponsible to spend money you don’t have on wants, it’s a bad idea to not spend money you do have on things you need.
I recently read a blog post that turned the “Wants vs. Needs” discussion into a game you can play at the grocery store:
One of the best ways for kids to understand how to differentiate between want and need is to take them shopping. As you put things in your cart, ask your kids if the item is a want or a need. Let them explain their decision, then give them your answer. This is a great time to talk to your kids about how you decide to use your money. How you budget for things like food, clothes and fun. Ask their opinion on the things you buy. For example, you need cereal, which one would you buy and why?
The best part of this game is that you can play it with even young kids – and they’ll be able to quickly be able to not only tell out the difference between wants and needs, but they’ll be able to talk honestly about it as well. Starting kids off early with this skill will prove invaluable as they age into the teenage and young adult years.