How to Teach Your Children the Value of Money: Wants vs. Needs

Wants vs Needs
Children want things. Lots and lots of things! At least, I know that mine do. This has been an ongoing battle since I can remember. However, since it is an ongoing battle, I decided that it makes much more sense to turn these wants into teachable moments.

Wants vs. Needs

The first step in the battle is to help your children understand the difference between a want and a need. This may sound easy, but it isn’t always because children see in shades of gray. So to make this as easy as possible, I break needs down to my kids this way:

  1. Food
  2. Shelter
  3. Clothing
  4. Warmth
  5. Love

Now I am sure some of you will say that love is not a need, but I beg to differ. Being truly loved changes how one sees the world, giving them a better outlook on life which in turn increases the effectiveness of their body processes and their quality of life. Therefore, it equals a need.

Some of the Q & A sessions that we get involved in have a tendency to include which type of food is a need or a want as well as which type of clothing or shelter. There are basic needs and then anything above and beyond those are wants. Examples include:

  1. Food – Needs: fruits, veggies, beans/meat, rice/potatoes. Wants: pizza, chips, french fries, ice cream, candy.
  2. Shelter – Needs: safe, warm, dry housing equipped with a kitchen, bathroom and bedrooms (children CAN share bedrooms and do 2/3 of the time here in the States). Wants: Basement, Theater Room, Play Room, Guest Room, Wine Cellar, Pool, etc.
  3. Clothing – Needs: Weather appropriate clothing and shoes that fit properly. Wants: Designer clothing and shoes, more clothes than are required for survival.
  4. Warmth – Needs: Shelter and clothing that provide the basic requirements to keep warm. Wants: Shelter and clothing that go beyond the basic requirements needed due to size and/or labels.
  5. Love – All love is a need!

Attaining Wants

Once these distinctions have been imparted upon the kids, the next step is to teach them how to get these things that they want so badly. I am all about teaching them how to survive in the world, which means that I am NOT going to buy them everything they want whenever they want it. I also believe that if somebody works hard for something, then they cherish it more and take better care of it. Therefore, when they come to me with something they really want, I will work on a plan to help them attain this thing.

A very good example is when my son wanted a 3DS about 4 years ago. At this time he was 7 years old but smart enough to know that I wasn’t just going to buy it for him. I told him that we needed to do the research on it and see if this was really what he wanted or if another game system, that was cheaper, would do what he wanted.

His research project was to investigate this, as well as the cost, and any other accessories that he wanted. Once he had the list of things that he wanted, I then made him research all of the different places to purchase it and find the best deal.

This all went down at the end of August until the beginning of September. Once he had the info that I needed to make an educated decision, he presented it to me in written format (because I am mean mommy and make him work on his handwriting skills) so that we could go over it together. I wish I had kept it or taken a picture of it because it was pretty well thought out for an 7 year old!

We went over the information and then discussed how much of this I would be willing to pay, which was 50% of the cost of the game system. However, if he earned the other half by Thanksgiving, so that I could purchase it by Christmas for him, then I would throw in 2 games and the protective case.

He was excited by this prospect, but then I had to reel him back in and ask him how he planned to earn this money. That stopped him in his tracks for a minute. But we worked it out and he came up with a plan to do extra chores around his grandparents’ houses and some of my friends’ houses to earn money. He raked leaves, picked up sticks, helped blow leaves with a backpack blower, put away dishes, made beds, swept floors and broke down boxes for recycling.Presley_3DS

He worked pretty hard for that money, and was very good about getting his pay for his work, which was very funny to see how tenacious he was about that part of it. All in all, he was very excited to get his 3DS on Christmas and has taken exceptionally good care of it since then because it was something that he worked hard for.

I was teaching him the value of a dollar and what hard work can net you. But I was also teaching him to respect the process of gaining said wants and taking care of them once you attain them. I have repeated this exact same system many times since, not just with him but also with my daughter the very next year when she was only 5! It works beautifully each time.

What processes have you implemented to teach your children the difference between needs and wants?


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  1. Jayson @ Monster Piggy Bank says:

    I once remembered when I taught my child the topic on needs and wants, we got cutouts of pictures from newspaper and magazine and placed it in a big white board with two columns “needs” and “wants.” It was an effective strategy because he asked questions during the process and I was there to guide him.

  2. Good idea to divide the 5 basic need lists into separate “need” and “want” categories. Though Pizza veers dangerously close to “need” category. I think this article illustrates well that old school techniques for raising children like encouraging them to do extra chores for friends and family can encourage the active mindset necessary to deal with money.