Needs vs Wants: A Simple Guide to Teach Your Kids Smart Spending

“Do we need it, or do we want it?”

If you’ve ever found yourself whispering that mantra while staring down a toy aisle with your child, congrats — you’re already halfway to teaching them one of the most important money lessons there is.

Understanding the difference between needs and wants sets the foundation for all future financial decisions. Let’s break it down, keep it fun, and bring it into your everyday family life.

🍎 What Are Needs and Wants? (Simple Definitions)

• Needs = Things we must have to live.
  Think: food, water, shelter, basic clothing, school supplies, transport to school.

• Wants = Things that are nice to have, but not essential.
  Think: lollies, toys, name-brand clothes, streaming subscriptions, the latest iPad.

  
  💬 Tip: Kids often assume their wants are needs. That’s totally normal. The goal isn’t to make them feel bad for wanting things — it’s to help them recognise the difference.

🧃 Real-Life Examples to Spark Conversations

Use moments in daily life to teach the difference. Keep it casual, and ask them to think it through with you.

• At the supermarket
  “We need bread and milk so we can eat breakfast this week. Do we need juice boxes, or are they more of a want?”

• Getting dressed
  “Warm clothes for winter are a need. But having 10 T-shirts in every colour? That’s probably a want.”

• Lunchbox chats
  “Your sandwich is a need. The chocolate bar is a want. Sometimes we get both, but it’s good to know the difference.”

🎲 3 Easy Games to Make It Stick

Game 1: Need or Want? Sorting Game (Ages 5+)

Write or print out pictures of different items (e.g. shoes, bike, broccoli, Xbox). Mix them up and get your child to sort them into two piles: “Need” and “Want.” Make it harder: ask why they chose each pile.

✅ Bonus round: Add tricky ones like a winter coat or internet access and have a discussion. These can be both — depending on context!

Game 2: The $20 Challenge (Ages 7+)

Give your child a pretend $20 (or use Monopoly money). Lay out 10 items with price tags — a mix of needs and wants. Their mission: spend the $20 wisely. Afterwards, talk about their choices. What did they prioritise? Why?

👀 Watch for their reasoning: “I chose the bus pass so I can get to school — that’s important.”

Game 3: Needs vs Wants Walk (Any age)

Go for a walk in the neighbourhood or around the house. Call out items you see — a bus stop, a smoothie shop, school bag, a cat toy — and ask: “Need or want?”. Encourage your child to take turns spotting things too.

💡 Everyday Teaching Tips

• Use your own purchases as examples.
  “I wanted that new phone, but my old one still works — so I’ll wait.”

• Praise mindful choices.
  If they choose to save their pocket money instead of spending it all on toys, celebrate it!

• Talk about trade-offs.
  “We’re saving money on takeaways this month so we can go to the zoo — that’s a want we’re planning for.”

🙌 The Goal? Empowerment, Not Guilt

This isn’t about making kids feel bad for wanting things. It’s about giving them the tools to make thoughtful choices, build patience, and understand the value of money. Even adults still wrestle with needs vs wants sometimes (yes, that $7 coffee counts 😅).

But by planting the seed early, you’re setting them up to grow into confident, money-wise humans. And that’s a need we can all get behind.