Needs Vs Wants: Do Your Kids Know the Difference?

Needs vs. Wants: Do Your Kids Know the Difference?
Four ways to teach your kids a lesson that can shape their future financial priorities

For kids, recognizing the difference between needs and wants can be difficult. Learning the difference, however, can be an important lesson that will help them become financially responsible as they enter adulthood.

April 27 is National Teach Children to Save Day, which is a great time to introduce or reinforce the concept of needs versus wants to your children. To do so, Iowa Bankers Association has put together four suggestions for ways you can teach your children the difference between needs and wants.

1. Talk about money — Don’t hide your budget from your kids. Let them see what it costs to provide basic needs — food, water, clothes, shelter, etc. Show them what you have left over and where you decide to allocate that amount. Talk to them about the importance of saving, and share the financial goals you’ve set for yourself.
2. Volunteer — One impactful way to show children the difference between needs and wants is to let them see people who are truly in need. Volunteering at organizations that help people who are dealing with food insecurity or are homeless can help them gain a new appreciation for what they have while also creating empathy for those who may be struggling.
3. Take them grocery shopping — A grocery store is a great place to show kids the difference between needs and wants. Go through your list with them and as you fulfill each item, ask your child if it’s a need or a want. Then explain whether they’re right or wrong and why it classifies as one versus the other.
4. Browse the web — There are many worksheets you can download or books you can buy or borrow from the library that teach children the difference between needs and wants. Do some searching online to find books and activities that will be a good match for your kids.

Taking the time now to teach your kids the difference between needs and wants can shape their financial behavior for years to come. Simply knowing which items are essential to their well-being will help them learn how to prioritize their own finances as they progress through different life stages.

Get your little one excited about saving by joining the Lil' Pioneer Savings Club today!