Teaching children to distinguish between wants and needs: a key step in financial education

In a world of fast-paced consumerism and instant gratification, one of the most valuable financial lessons we can teach our children is the difference between a want and a need . This skill doesn’t just help with better financial management; it also lays the foundation for a more balanced and conscious life.

Understand and explain the basics

• Give a clear definition of what a need is and what a desire represents :

A need is something that is essential to our survival and well-being, such as food, shelter, and clothing. A want, on the other hand, is something we would like to have, but is not essential.

• Maintain an open dialogue : Take the time to engage in regular conversations about this topic during your daily activities or leisure planning.

Educational strategies

• Use role play : Since children learn most through play, role-play situations where children must choose between a want and a need, allowing them to understand the consequences of each choice.
• Include them in managing the family budget : Involve children in your planning, particularly by highlighting the spending items linked to needs and those linked more to wants.

Practical learning

• Give them a weekly allowance and, while letting them make their own choices (even if it leads to mistakes!), guide them to decide wisely how to spend it, distinguishing between wants and needs.
• Teach them to save : Encourage them to save for something they really want, teaching them the value of money and delayed gratification.

Everyday examples

• While you are shopping with your child, take the time to discuss the items in your cart together and categorize them into needs and wants.
• Use advertisements as examples to demonstrate how media drives consumption of wants rather than real needs.

Teaching children the difference between wants and needs is a crucial aspect of financial education. Not only does it help them make better financial decisions, it also helps them develop critical thinking skills when it comes to consumption. By guiding them through these lessons, we are preparing them to become financially savvy and responsible adults!

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