One of the most important money lessons a child can learn is how to tell the difference between a want and a need. It sounds simple—but when there are colorful toys, snacks, and gadgets everywhere you turn, it can be tricky, even for adults!
Helping your child understand how to make smart spending choices is a big step toward building lifelong financial habits. Here’s how you can break down the concept of “wants vs. needs” in a way that’s fun, clear, and age-appropriate.
Needs are the things we must have to live and be healthy and safe. These are the basics—essentials that every person requires.
Examples of needs:
Food and water
Clothes to wear
A safe place to live
School supplies
Transportation (like a ride to school)
Teaching Tip: Ask your child, “What do you think we couldn’t live without?” Turn it into a game by listing items and having them guess if it's a need or a want.
Wants are things we’d like to have, but we don’t absolutely need them. They can be fun, exciting, or trendy—but we can still be okay without them.
Examples of wants:
Toys and video games
Candy and snacks from the store
Name-brand clothes
Going to the movies
The latest phone or tablet
Helping your child recognize wants helps them learn how to prioritize spending and save for fun extras—a powerful lesson they’ll use for the rest of their life.
Here are some kid-friendly ways to practice “wants vs. needs” at home:
Next time you're at the store, ask:
👉 “Is this something we need, or something we want?”
This simple question helps your child pause and think before asking for something or making a purchase.
Create a fun sorting game using flashcards or pictures. One pile for needs, one for wants. Make it a challenge to see how fast they can sort them correctly.
When your child earns or receives money, help them decide what portion should go to:
Saving for something they want
Spending on small treats or fun
Sharing with others (optional but great for teaching generosity)
Using jars or envelopes labeled "Spend," "Save," and "Give" can make this process hands-on and visual.
If your child has a Dollar Dog Youth Savings Account, this is a perfect opportunity to practice smart money habits! Encourage them to:
Save up for something they want, like a special toy or game
Make regular deposits to grow their savings
Talk about the difference between saving for a need (like school supplies) and a want (like a new game)
And remember—they’ll get a prize every month they deposit $5 or more at a branch, which makes saving even more exciting!
Learning the difference between wants and needs is an ongoing conversation. The more your child practices, the better they’ll get at making thoughtful decisions with their money.
So next time they ask for a toy or treat, don’t just say no—start a conversation. You might be surprised at how quickly they pick it up!
If you’re looking for more fun ways to teach your kids about money, stop by a branch or visit us online. We’re here to help you raise confident, money-smart kids—one deposit (and Dollar Dog prize) at a time.
If you enjoyed this article, find more just like it on the rest of our MoneySmart Tips blog.