Once your child begins amassing their own money and actually has some purchasing power, you can start teaching them how to separate wants from needs.
The core of this lesson is teaching your child that wants are things we’d like to have, and needs are things that are necessary to survive and function; such as food, clothing, and shelter.
For a children, nearly everything they want to spend money on will likely be wants. They’ll want a new toy, a new doll, a new book or the latest trending “must-have” among their friends. By teaching them how to tell the difference between true needs and wants, you’ll be giving your child the tools to make responsible spending choices while standing up to peer pressure.
You can teach your child this lesson any time you shop together. You can point out a cute top or a pair of boots that you’d love to buy but are out of your budget. Tell your child that these are wants and not needs, and that you are going to use your money on needs before buying any wants. Similarly, when you do splurge on a want, let your child know that you have made the conscious decision to purchase this want because you have already paid for all your needs.
Bonus activity: Create a set of cards and write one want or need on each. Have your child separate the cards into two piles by separating the wants or needs. For an older child, you can have them place the cards in order from highest priority to lowest.
Use these conversation starters to help bring the lesson home:
- What are some things you need in order to survive?
- Can you list some things you wish you could have?
- Is it more important to pay for the things we need or for the things we want?
- How can we pay for some of our wants?