Financial Learning for Kids Series - Needs Vs. Wants

 

Needs Vs. Wants

Good financial decisions start by being able to distinguish between what is necessary to have and what is nice to have. Families spend their money first on needs like food, shelter and medicine. Meanwhile, nice-to-have purchases, such as toys and vacations, should be bought only after needs have been met.

Older children and teens can further refine their understanding of what constitutes a need. For instance, while everyone needs clothing, designer jeans fall into the want category. Likewise, a home is a necessity, but a personal bathroom or even one's own bedroom can be characterized as a want, rather than a need.

“Needs” are the things that we rely on to live (comfortably). “Wants” are not essential to our life, health, or hygiene; they are just things we would like to have.

Here in this article, I’m going to introduce two interesting activities to get a clear understanding and difference between Needs and Wants.

·        If you regularly go to the grocery store along with your parents, take a copy of your mom’s grocery list and start identifying those items if they are needs or wants. All the essential items that you cannot manage without becomes your NEEDS and all the other items that you can still manage with or without an alternative are your WANTS. As you walk through the aisles and pick up items, ask to yourself if it’s a need or a want. For e.g. Tooth Paste and Tooth Brush are Needs whereas Candy / Cookies could be your WANTS.

·        If your mom can trust you with scissors, you can do this discussion-provoking exercise to visualize wants versus needs. Grab a stack of magazines or advertisement flyers from the newspaper, as well as a sheet of paper. Draw a line down the center of the paper and label one side as “Wants” and one side as “Needs”.  Cut out items that fit into each category, and then talk to your parents about the choices you have made.

No matter how much or how little we have, everyone wrestles with this issue including grown-ups. With all the poverty and suffering around the world, I want you children to have a realistic perspective on the basic necessities and luxuries of your current and future lifestyle.

 

With Love,

Aparna Nayakam