Making Kids Money Masters

Blog

Needs vs. Wants

April 1, 2013

“I need this toy!” can be heard from children in toy store aisles around the country. Of course,
kids do not need a toy. They want the toy.

Walter the Vault teaches kids that money has value and is a medium of exchange for things one wants and needs. Distinguishing needs from wants is a critical component to financial education.

Needs. Something one has to have and cannot live without. For example: food, water, shelter, and health.

Wants. Something one would like to have but is not necessary. For example: video games, toys, candy, and jewelry.

The distinctions between needs and wants are not always straightforward. Clothing is a general need but a specific designer brand is a want. Similarly, food is a need but chocolate is a want.

Having children understand the basics of finance, such as money does not grow on trees, will help with spending and saving. Extra birthday cash does not have to be spent. Next time out shopping with children, ask whether he or she needs or wants the item. Then ask for an explanation. Determining the difference between a want and need will assist children with making financial decisions such as whether to save or spend.

Enter Walter’s spending chart, the WALT acronym. Remember to WAIT, ASK, LOOK, and THINK when making a purchase:

Waiting before spending money will give a moment to gather
thoughts.

Asking if better off in the long-run by putting the money into
savings.

Looking for advice from friends and family may open eyes to
new possibilities.

Thinking before buying will assist with making a more informed decision.

WALTAcronym

Any other suggestions on teaching children some differences between needs and wants? Should money be spent or put into savings? Next time Walter will discuss ways children can earn and save money in efficient ways.

Sign up for our mailing list!

Be the first to learn about
fun new games, coloring pages
and financial literacy charts.

© 2019 Money Masters, Inc. · Privacy · Terms

Subscribe to our mailing list

By clicking the "subscribe" button below you agree that you are 13 years of age or older.