Needs vs Wants Comparison for Kids and Teens
This video performs a needs vs wants comparison in a simple, concise way for kids and beginners. It could be used by kids & teens to learn about needs and wants, or used as a money & personal finance resource by parents and teachers as part of a Financial Literacy course or K-12 curriculum.
Suitable for students from grade levels:
- Elementary School
- Middle School
- High School
The topics covered are:
- What are needs and wants
- Why is it important to know the difference between needs and wants
- Are needs and wants the same for everyone
- How can you tell if something is a need or a want
- How can you put this knowledge into action
What are needs and wants?
Needs are things that are essential for your survival – like food, water, clothing and housing. So expenses related to them such as rent or mortgage, water and electricity bills, medicines and insurance are needs.
Needs also include things that are necessary for a job or school – which could include a computer or smart phone, a car, gas, shoes, school supplies, etc.
On the other hand, wants are things that are not necessary but are nice to have as they improve the quality of your life.
For example, fancy restaurant meals, movies, vacations, streaming services, video games, etc.
Needs vs Wants: Why is it important to know the difference between needs and wants?
Knowing this difference is very important because it can help you live within your means by understanding and controlling your spending which is key to a financially healthy life.
Most often people misunderstand wants as needs and end up overspending. You don’t have to spend only on needs – by all means you should fulfill your wants every once in a while – but understand that it is a want.
When you learn to differentiate between needs and wants, it’s easy to spot overspending and prioritize spending on needs before wants, so you don’t get into credit card debt or live paycheck to paycheck.
Are needs and wants the same for everyone?
No – one important thing to remember is that the same item can be a need or a want depending on one’s personal situation.
For example, if you have to drive to work, then a car is a need. But if you live in a place with good public transportation, a car is a want.
And even if a car is a need, if you are eyeing a high-end SUV, then it definitely is a want.
In the same way, clothing is a need. But getting the latest designer clothes is a want.
Needs vs Wants: How can I tell if something is a need or a want?
A good way to tell is by asking yourself a few questions.
First, think about whether something is necessary for you to function or for your well-being. If the answer is yes, see whether you can fulfill the same need in a less expensive way.
For example, you can buy regular sneakers instead of the expensive limited-edition ones. Or you could buy a used car instead of a new one.
By asking these two questions, you should be able to tell whether something is a need or a want.
Although they may not seem essential for your immediate survival, saving and paying off debt can also qualify as needs, since they help ensure a healthy and financially secure future for you.
How can I put this knowledge into action?
A great way to use this needs vs wants comparison to easily eliminate all overspending is by creating a budget.
Click this video for a beginner-friendly guide to create a budget in 6 simple steps.