The lifestyles we live in seldom allow us to appreciate the things we have and keeps us busy to chase the things we want. Even as adults, we struggle with our desires and often fall into our temptations. Our children are fortunate enough to never have to worry about rents, grocery bills and clothes. But keeping them in a bubble will lead them to take everything for granted and cultivate a behaviour of ignorance towards the needs. They should learn about the value of their needs and practice self-control over their wants.
Learning one or two lessons at school is not enough to equip kids with the financial knowledge they need. Daily habits and practices at home are essential to building their character. It may sound too early for your kids but if they are over demanding of their wants while mistaking it as a need; it is high time to teach them before it’s too late.
Talk To Your Kids About Money
Since all needs and wants are associated with money, the first step would be to have an open conversation with your kids and learn about their perception towards money. Meaningful conversations will help you in identifying any misconceptions and their first lesson could be based on clarifying that idea. Children notice a lot more than we think and end up creating assumptions of their own.
Start off by explaining them how you earn money and use it to pay for your food, clothes, house, rent etc. Since kids are exposed to countless advertisements today, tell them that not all promises they make are true and they just want you to spend all your money on their products. Tell them about the various ways you can pay for the goods like cash or credit and which ones are safer and convenient. Such open discussions will definitely develop their problem-solving skills and you never know, they might even come up with better solution than you.
Start by giving them examples of the basic needs they require like air, water, food, shelter etc. Wants include toys, chocolates, sodas, electronics and comic books etc. Help them prioritize needs based on Maslow’s Hierarchy of Needs model and understand that needs like air and sunlight is free but water, food and home have to be paid for while love, good grades and appreciation needs to be earned from people. There are plenty of worksheets and exercises online which can help them distinguish between needs and wants.
Here are a couple of quick activities you can do:
- Ask them to cut out pictures of items from the magazine and stick them in the needs and wants sections on a paper.
- At the supermarket, demonstrate them the things they need (vegetables, fruits, cereals) and the things they want (candies, cookies, donuts).
The key is to balance between the two in the right way. Needs such as clothes and shoes should be considered as wants if they are from expensive brands.
Making Good Money Habits
Good financial habits best achieved through the daily routine. Kids need to be aware of the value of their commodities. Provide them with the grocery bills, electricity bills and prices of toys etc. so they can learn the value of each item and expense. Have them suggest of way they think can reduce the bills and expenses. Then set a target for the next month.
Let them do things to earn for their small wants through chores and homework. You may encourage them to save up for their most requested (and costly) toy and ask others to contribute to a “fund me” jar. Keeping track of saving and avoiding wasteful spending should also be taught.
Most importantly, remind them to donate a part of their saving to kids in need. Giving away old toys in good conditions should be a periodic practice. Reward them for saving up their monthly allowances.
Try to engage them in fun activities and play games like Monopoly with them. Ask them questions like what would happen if we spend all our money on cookies and left with nothing for food and bills. If you struggle to make ends meet, let them save up for their secondary needs by setting up the system of ‘extra work’. Also, set a budget for things like Halloween costumes, shoes, clothes etc.
Alternatives to Wants
The reason why kids desire toys is because they need to enjoy their leisure time. But you can show them that pleasures are not limited to toys since there are many other ways one can enjoy like a trip to parks, beaches, zoos, painting, baking, cycling, reading, dancing and so on. This will help them in discovering their interests and hobbies gradually leading toward their talents. Give your kids a taste of experience and show them that enjoyment doesn’t have to be materialistic. Fruit picking, camping, building sandcastles, playing frisbee, visit animal shelter centre and farmers’ market are many among the affordable ways they can enjoy while developing physical and intellectual skills. Birthday gifts could include indoor skydiving, trampoline parks, gourmet dinner, amusement parks, water parks etc. whatever suits your budget best.
Practice What You Preach
Do not expect your kids to understand if you indulge in luxuries of your own. Children do observe everything about the purchasing decision you make at the store, or the frequent online shipments coming at the door full of things that you don’t really need. This escalates their expectations and creates an assumption that their wishes would be fulfilled the same way. And the refusal of their demands leads up to frustration and stubbornness. In case of certain unavoidable big purchases, make sure you explain your kids about the reasons why you need the item and that you are going to eat out less this month because of it.
Remember that parents are role models for kids and the best way to teach your kids about values is to demonstrate them through your practices. Maintaining a calm behavior and firm stance where necessary is essential to deal with kids.
The idea is not to forbid kids’ wants but to strike the right ‘balance’.
Let us know about your thoughts in the comments below if you want to add something to this article.
Apprentice Business Architect
This is a very thorough and well thought out article. As a parent, this information is spot on.
My oldest loved Monoply and we used it to teach him to count out change! He is old enough now that we make him do extra chores to earn money for things he wants. I also go over our budget with him when he asks for something expensive.
I would also add that talking about priorities is important in teaching about needs and wants. Prioritizing is a skill they need to practice so they can make better decisions in the future. When our kids want more than we can afford, I ask them to figure out which option is the most important to them.