“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: