Kids and Money: Wants vs. Needs (2025)

FAQs

Kids and Money: Wants vs. Needs? ›

A want is something you would like to have, such as a bike, a new camera or a new Xbox game. A need is something that is necessary, such as food, clothing or shelter. Sometimes wants do become needs. If you live out of town and play on a sports team, a bicycle could be a need.

Needs are things that people require to survive. Food, water, clothing, and shelter are all needs. If a human body does not have those things, the body cannot function and will die. Wants are things that a person would like to have but are not needed for survival.

Fixed expenses like rent or mortgage payments fall under needs, while variable expenses like dining out or shopping fall under wants. Allocate your income accordingly, ensuring that essential needs are prioritized before discretionary wants.

“Needs” are necessities that you cannot live without. Without what we need, such as food and water, our lives or health may be compromised. “Wants” are non-essential items. Without them, your life won't be materially affected, though you may be upset for a while.

In time, your child should begin to understand what they're asking for in the context of the household income, but this is also why earning money, or giving your child pocket money if you can afford it, can help. Having ownership of their own money means they can start to make their own decisions.

Needs include food, housing, healthcare, and transportation—in other words, anything you really can't do without and maintain your health and security. Wants include items like entertainment, travel, designer clothing, and so on. If you can trim it from your budget, it's probably a want vs. a need.

Examples of wants that people would like to have is financial monitoring, saving time, higher paying job, more comfort, healthier diet, physical fitness, spirituality, friendship, companionship and safety.

The most common way to use the 40-30-20-10 rule is to assign 40% of your income — after taxes — to necessities such as food and housing, 30% to discretionary spending, 20% to savings or paying off debt and 10% to charitable giving or meeting financial goals.

You'll want to place insurance and a basic phone plan under needs, but a subscription to a streaming service or a premium cable package will more than likely fall under wants. The next step is to tally up what you're spending in each category and see how the totals compare to your monthly take-home income.

Key Takeaways. The 50-30-20 budget rule states that you should spend up to 50% of your after-tax income on needs and obligations that you must have or must do. The remaining half should dedicate 20% to savings, leaving 30% to be spent on things you want but don't necessarily need.

What are the 5 basic wants of a child? ›

Kids must feel safe and sound, with their basic survival needs met: shelter, food, clothing, medical care and protection from harm.

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.

Explaining needs and wants simply to kids

The best way to explain this is to tell them they have everything they need, but if they want this item so badly, they need to save and work for it using their allowance and money they've earned from chores.

Whether you're saving for emergencies, paying off debt, or building retirement savings, all financial goals can be considered needs. Achieving your Money Milestone is essential to staying financially fit and takes precedence over your wants throughout your journey to Financial Freedom.

A need is something that is necessary to live and function. A want is something that can improve your quality of life. Using these criteria, a need includes food, clothing, shelter and medical care, while wants include everything else.

Wants include spending that isn't necessary for daily life, while needs are essential for your survival. Understanding the difference between the two is important for building a budget and maintaining your financial health.

A need is something that is needed to survive. A want is something that an individual desires, but would be able to live without. A primary distinguishing feature of a need is that it is necessary to sustain life. Yes, there is an overlap of products being used for needs and wants.

Ask the students to raise their hand and give you the definition of a want or a need. Explain to them that: A need is something that you cannot live without, i.e. water, food, or fuel for warmth. A want is something that is a luxury.

A need is something that is necessary, such as food, clothing or shelter. A want is something you would like to have, such as a new phone, video game or bike.

Need: Something that is required to live (food, water, shelter, clothing) Want: Something we would like to have (bike, iPad, candy etc.)