NEEDS VS WANTS : THE MONEY SKILL EVERY FAMILY SHOULD MASTER
- KidVestors
- 2 days ago
- 5 min read
If you have ever walked into a store for toothpaste and somehow walked out with throw pillows, a candle, a smoothie, and absolutely no toothpaste, you already know this truth. Understanding needs vs wants is one of the most important money skills any of us can learn. And for kids and teens who are just dipping their toes into the world of money, mastering the difference between a need vs want early can be a total game changer.
Today we are diving into the real meaning behind needs vs wants, how to identify them in everyday life, why it matters for personal finance, and how our budgeting game and need vs want simulation inside KidVestors can help kids sharpen this skill in a fun, interactive way. Let’s get into it.
Why Knowing Needs vs Wants Is So Important
Before we talk numbers, charts, or saving goals, we talk about one thing first. Needs vs wants.
Here is the simple version. A need is something you must have to live or function. A want is something that makes life enjoyable but you can technically live without it. Easy enough, right? But here is the thing. Even adults struggle with this. We convince ourselves we need that latte or that new gadget because we worked hard this week or because it is on sale, often forgetting the concept of delayed gratification. Companies and ads are built to blur those lines too.
Teaching kids the difference between wants vs needs early helps them:
Build healthier money habits
Strengthen their decision making
Avoid impulse spending
Learn delayed gratification
Start budgeting with confidence
Understanding needs vs wants becomes the foundation of their personal finance journey. You cannot build smart savings habits or long term investing strategies if you cannot distinguish between a need vs want. Once kids and teens get this part, everything else with money becomes easier.
Needs vs Wants Examples Kids and Teens Will Relate To
Examples always make things clearer, especially when teaching the idea of wants vs needs to younger learners. Here are some real life, everyday examples that kids and teens immediately understand.
Needs
These keep you safe, healthy, and functioning.
Food that actually counts as real meals
Water
Clothing that you need for the season
Basic school supplies
A safe place to live
Transportation for school or activities
Internet for homework
Personal hygiene items
Wants
These are fun, enjoyable, or cool to have, but not necessary for survival.
Fast food and takeout
Designer clothing
A new video game when you still have others to play
Upgrading to the latest phone when your current one works fine
Name brand snacks
Streaming subscriptions
Concert tickets
Trendy shoes
Helping kids identify needs vs wants does not mean cutting out all fun spending. Instead, it teaches them to put needs first, wants second, and budget for their wants instead of impulse buying everything in the moment.
You can even turn this into a fun family challenge. Ask your child to go through their room and label items as needs vs wants. You will be surprised by how quickly they start recognizing the difference when they see it through their own eyes.
How Needs vs Wants Helps With Budgeting
Budgeting gets so much easier once kids understand the difference between a need vs want. When they know which expenses are required and which ones are flexible, they can create budgets that actually work.
Here is how identifying wants vs needs helps with budgeting:
1. It creates spending priorities
Kids learn that needs must be taken care of first. This teaches discipline and financial responsibility.
2. It helps them set realistic savings goals
When they understand their wants are optional, they start saving intentionally. Maybe they want a new pair of headphones. Once they label it as a want, they can save for it instead of asking for it impulsively.
3. It reduces overspending
Most overspending happens when wants creep into the “need” category. Teaching kids how to identify needs vs wants early prevents these habits from forming in the first place.
4. It builds long term habits
Budgeting is not just math. It is mindset. Kids who learn to prioritize their spending choices grow into adults who can manage money with confidence.
Plus, budgeting becomes way more enjoyable when kids can see the payoff. Saving for something they want is motivating. Seeing their progress in real time makes budgeting feel like a game. Speaking of games, let us talk about a fun way your child can practice all of this.
Practice Makes Perfect With KidVestors Budgeting Game
Kids learn best when they can see and do. That is exactly why KidVestors created a budgeting game and an interactive need vs want simulation inside our platform. It is designed to help kids and teens make real world money choices in a safe and engaging environment.
Here is how it works:
Budgeting Game
Students receive virtual checking and savings accounts. They learn how to:
Create saving goals
Track spending
Manage their accounts
Cover needs first
Budget for wants
Make decisions that affect their virtual money
The game feels real but uses virtual currency, so kids can learn without any risk. They get to feel like they are managing their own finances just like they will in real life.
Need vs Want Simulation
This activity walks kids through different scenarios where they must choose if something is a want or a need. They get instant feedback on their choices which helps them build stronger money instincts. The more they play, the better they get at identifying needs vs wants in real life.
Plus, when they complete the activity, students earn KV Bucks which they can use across the platform. As they navigate through activities, lessons, and games, they strengthen their financial literacy in a way that feels like fun, not homework.
Our goal is simple. Make financial literacy feel accessible and enjoyable. Once kids master the difference between a need vs want, they unlock a skill that will benefit them for life.
Teaching kids and teens about needs vs wants is one of the best financial gifts you can give them. This single concept influences how they save, spend, budget, and even invest in the future. When they understand needs vs wants, they start making smarter decisions that carry into adulthood.
If you want your child or students to practice these skills in a fun and interactive way, try KidVestors free. Inside our budgeting game and need vs want simulation, kids and teens get hands on experience that strengthens their financial literacy one decision at a time.
Ready to help your child build stronger money habits?
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