How to Teach Kids Needs and Wants

It can be confusing as a kid, or an adult (and especially teens) to understand the difference between needs and wants. If you have struggled explaining needs vs. wants, or have struggled with making the distinction yourself, then this quick guide can help you with info and offer tricks to teach needs and wants to kids.

Resources to understand needs vs. wants

For you – Here’s two sentences that will help you endlessly as your kids grow and their understanding of wants and needs change (as do yours when those really great shoes go on sale, or whatever makes you falter on your budget. You now know mine!).

1. Needs are things that are essential to live, like a home, food and basic clothing to keep you warm or cool.
2. Wants are those things that make life, well, worth all that hard work, like take-out pizza or vacation and copious amounts of candy at the checkout.

Basically needs are basic clothing, food, shelter, transportation and medical care. Everything else is wants. Some things can fit in both areas, like cereal or a nice car. The gray area is thick between these two black and white spaces, and that’s up to you and your family to decide. Actually, as my twins grow, I realize that the gray area between needs and wants is very different for each. But, with a good understanding of the money they earn and is required to support their needs and wants, they make good decisions (or better than I did with a fresh five and a trip alone to the candy store! That was another time, ahem.).

• PBS Learning Media has a great lesson for homeschoolers on needs and wants. This is one of my favorite resources, FYI.

• This Reading Mama has a free study unit on needs and wants that is great for littles and through elementary school.

• Grab these two worksheets to help your kids.

Preschool to Kindergarten Lessons

Little kids are already up on what is trending, what they want and have a growing wish list of things they think they need. This is the perfect time to introduce the wants vs. needs game. As we perused the grocery shelves, I talked out loud about what I needed and what I wanted.

When the twins would zero in on a colorful box of sweet stuffs (and if I didn’t have a crazy good coupon), I would affirm their opinion that yes, that looked really good, but it’s a want not a need and we’re just here for the need stuff today. That’s not to say I didn’t get their favorites and spoil them nearly rotten with goodies. I would get excited over a coupon and raise a box of sweet crunch and say this is a want and we can get it half price so we can splurge.

Later on, when I would splurge without coupons, the kids knew this is a 1) special occasion and 2) worthwhile expenditure, like a birthday or a much-needed night out when life got a little bumpy. Money is made to make your life better, we hope. And if we’re lucky enough to have enough, sharing our prosperity with others in meaningful ways.

I had a friend that saved every penny, didn’t go anywhere or buy new. She eventually paid off all her debt and was sitting pretty. But she didn’t enjoy what she was making. Teach your kiddos a healthy balance between spending and saving.

You can also make it a game. The grocery store can be a great place to teach about wants and needs, but it’s riddled with minefields Hold up the item and say want or need, but be careful not to make this torturous. Hold up pasta, if that’s their favorite thing, and say it’s a need.

Help Elementary Age Kids understand needs and wants

As they age, you can still use real-life situations for understanding needs and wants. The grocery store seems to be a regular in our money-spending days so I’ll go for something I might want, like expensive juice (oh, POM, why are you so expensive?!). Then put it back on the shelf (and don’t let them see you yearn for the sweet concoction), and talk about how it’s not something I need without a good coupon and a sale.

Again, every family is different, but you can figure out how to do this in a way that they go, oh, okay, that cereal is a want, unless all our needs at the store are met and we can afford to splurge on a want. It sounds complicated, so don’t do every item, just show them a few so they get it and don’t get bored.

Middle School Lessons on needs and Wants

At the clothing store, a jacket is a need, but a Marvel comic jacket is a need. Now, they may see, smart little ones they are, that the new bright red name brand wallet is a want, when the plain brown at half price is a need. They may turn to you with those wide eyes of understanding that hey, man, rules don’t apply to the big people? Yah, no. It’s another time to talk about wants and needs and the freedom to choose when you save up.

Sounds great on paper, but it can be hard at the store! My kids gave me a the “mom, this isn’t within the want/needs rules” look, or rather they saw the parental hypocrisy in action, and called me on it. I can’t say I was 100, but I told them about the 80/20 rule. If we’re budget savvy 80% of the time, we can splurge 20% of the time.

Life is about enjoyment, earning money should also offer some room for luxuries. There’s a balance. They will find the right one for them. Mine tends to be 80/20. On paper. I love my bright red wallet. Every time I open my purse the sight of it makes me happy. That’s what I’m trying to teach my kids. That was a worthwhile buy for practical and personal reasons.

Talking to Teens About Needs and Wants

This is when it can get tough, according to my research (ok, asked my mom friends with teens). Life is full of choices and your kids watch you as you decide between an experience or a nicer car, new clothes or a home upgrade. As you make these financial choices of either going to Yosemite or buying a Tesla, take time to include your teens. They will have a better understanding of why you make these decisions, your values as well as the value of the experience or item you’ve chosen.

Let them have room to spend or you will be teaching them how to budget on your terms, not theirs. Many parents said that when they pulled the reigns in too tight, their child ended up with credit cards and spending habits outside of their parents strict rules. Talk to them about the dangers of credit. Banks, stores and more are more than happy to give 18+ adults credit cards at a truly high interest rate. Do you both a favor and talk to them about the difference between 10 percent and 30 percent interest rates.

More than anything, I heard parents who struggled with telling their kids absolutely not and putting up restrictions and then having no plan when their 18+ teen/young adult broke those rules, racked up debt and were afraid to come to their parents for help. Not financial help, but advice and a plan.

Help them make a budget. Make it tangible. Put in all the realities, including minimum savings at least, and then add in what they want. When they have the list of wants filling up their budget, ask them if it’s a want, a need or something to save up for. Then let go. And be there, without judgment, when they go over budget.