Needs versus wants: How to enhance your children’s financial freedom

Needs versus wants: How to enhance your children’s financial freedom

The teenage years are a whirlwind of emotions, social pressures, and a relentless barrage of “wants.” From the latest smartphone to designer clothes, teens are bombarded with desires that can easily overshadow true needs. But how do you, as a parent, explain the crucial difference between needs and wants in a way that resonates with your not-so-little one?

This blog post is your roadmap to navigating this crucial conversation. We’ll explore strategies to empower your teenager to become a mindful consumer and responsible decision-maker.

At its core, the difference between needs and wants boils down to essentiality.


Needs are the fundamental things we require to survive and function effectively. They include food, water, shelter, clothing, healthcare, and basic safety. Without these, our physical and mental well-being are jeopardized.

Wants, on the other hand, are desirable but not essential. They represent things that enhance our lives and cater to our preferences. The latest gadgets, designer clothes, entertainment options, and fancy restaurants all fall under the “want” category. Fulfilling wants can bring us joy and satisfaction, but they aren’t vital for survival.

Why Needs vs. Wants Matters for Teens


Teaching your teenager the distinction between needs and wants goes beyond just managing their allowance. Here’s why it’s important:

Financial Literacy Foundation
It equips them with the knowledge to budget effectively, a skill that will benefit them well into adulthood.

Responsible Spending Habits
They learn to prioritize needs and avoid impulse purchases, fostering financial independence.

Building Self-Control
Understanding wants helps them resist peer pressure and make informed choices about how to spend their money.

Gratitude and Appreciation
It cultivates an appreciation for the things they already have, fostering a sense of contentment.

Talking Needs vs. Wants with Teens


Teenagers crave autonomy, so a lecture-style approach might backfire. Here are some effective communication strategies:

Open and Honest Dialogue
Initiate a conversation, not a lecture. Ask open-ended questions about their wants and desires. Listen actively and validate their feelings.

Real-Life Examples
Involve them in real-world financial decisions. Show them a grocery receipt or a utility bill, explaining how needs are prioritized.

The “Opportunity Cost” Discussion
Introduce the concept of “opportunity cost.” Explain that choosing a want means giving up something else. Discuss how saving for a bigger “want” like a concert ticket might mean saying no to smaller, immediate wants.

Connecting Wants to Future Goals
Discuss their long-term aspirations (college, travel, etc.). Show them how responsible spending now helps achieve those goals and allows for bigger “wants” later.

Embrace Transparency
Be transparent about your own financial situation. Discuss your budget and how you prioritize needs in your household.

Collaboration Over Dictation
Instead of dictating “no,” work together to create a budget. Let them propose spending plans and discuss how wants can fit within the allocated resources.

Activities for Engaged Learning


Make learning about needs and wants interactive and relevant to their lives
The “Needs vs. Wants Challenge”
Set a weekly or monthly challenge. Ask them to track their spending and categorize it as needs or wants. Discuss the results and identify areas for improvement.

The “Needs vs. Wants Debate”
Assign roles and have a playful debate. One person argues for a specific item as a need, while the other argues it’s a want. Encourage them to find evidence to support their argument.

The “Subscription Audit”
Review all their subscriptions together (phone plans, music streaming, etc.). Analyze if these are truly needs or wants. Discuss the possibility of canceling unnecessary subscriptions to free up money for bigger goals.

Remember, You’re a Team


Teaching teenagers about needs and wants is an ongoing process. Be patient, understanding, and celebrate their progress. The goal is to empower them to become financially responsible adults, and by working together, you can navigate this journey successfully.