How to teach your kids the difference between needs and wants

Understanding the difference between a need and a want can help kids become more responsible and learn to manage their emotions when they can't get what they want right away. So, how can parents and carers talk to their kids about these concepts in a way that is understandable and relatable?

Explain the difference between needs and wants

Kids can have a hard time differentiating between what they need and what they want. As a parent or carer, it's your job to help them understand that needs are things that we require to survive and stay healthy, while wants are things that we desire but can live without. For example, food, water, shelter, and clothing are needs, while toys, video games, babycinos and lollies are wants (even when they feel like needs).

Try this activity to help illustrate the difference:

1. Create a "Needs vs. Wants" chart: Start with two columns: one for "Needs" and one for "Wants." You can do this on a piece of paper or on a whiteboard.
2. Brainstorm together: Sit down with your child and brainstorm a list of things that people need to survive, such as food, water, shelter, and clothing. Write these items in the "Needs" column.
3. Identify wants: Then, brainstorm a list of things that people want but don't necessarily need, such as toys, video games, lollies, and new clothes. Write these items in the "Wants" column.
4. Categorise other items: Take some items from around the house, hold them up and ask your child to categorise them as either a need or a want. For example, ask them if ice cream is a need or a want. If they're not sure, explain why it's a want (because
   you don't need ice cream to survive) and write it in the "Wants" column.
5. Take a field trip: As you go about your day, point out things that are needs and things that are wants. When you’re stopping for fuel, point out that fuel for the car is a need because you need to get to school and work. When you’re stopping for ice-cream, point out that it’s a want as you could live without it.

Ice-cream can sometimes feel like a need.

Talk about delayed gratification

Explain to your child that sometimes we can't get what we want right away, and that's okay. Sometimes, we must wait for things we really want, and it's important to learn how to be patient and deal with disappointment. For example, you can talk about how they might have to wait until their birthday to get a new toy or how they can save up their money or do chores to earn extra money to buy something they really want sooner.

Encourage goal-setting

Setting goals can help children learn the value of delayed gratification. Encourage your child to set achievable goals, such as saving up for a new toy or earning a reward for good behaviour. When they achieve these goals, they'll learn the importance of hard work and patience. In the Kit App, kids can set up savings Stacks for the specific things they want to buy and can watch as their money grows and feel a sense of achievement when they complete a savings goal.

Practice what you preach

Children learn best by example. If you want your child to understand the importance of delayed gratification, show them how it's done. For example, if you're trying to save money for a family holiday, explain to your child that it might take a few months or even a year to save enough money, but it will be worth it in the end.

Encourage them to learn with Kit

Parents and carers are busy, so we’ve created an interactive story to help kids learn as they go. Tap the Kit character in the Kit App and check out the Needs vs. Wants story under Learn it. Kit will take your little grownup through some questions that prompt them to consider whether different items should fall under needs or wants.

By explaining these concepts in a relatable way and giving real-life examples, you can give your child some autonomy to make their own decisions. Kids learn by doing, so consider introducing your kid to the basics of earning, saving, and spending in real life as soon as they are ready. Kit is here to help you navigate your little grownup’s journey to financial capability, sign up to Kit today.

Don’t have Kit yet? Sign up to Kit today and begin your children’s journey to financial literacy.

Consider the PDS, FSG, TMD and other important information at heykit.com.au/legal. Any advice given is general in nature and does not take into account your objectives, financial situation or needs so please consider whether it is appropriate for you.