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Teaching kids about money: needs versus wants

Our coach, Sherry Johnson, met with our kids and their friends to discuss money management.  She started the conversation by having the kids discuss what a need is versus a want.  This prompted some very interesting discussion — was clothing a need versus a want?  was a car?  a computer?  

The kids went through newspaper ads and cut out pictures of needs and wants.  Then as a group they had to pick their top 5 needs and wants.  The kids found this challenging.  Sherry used this as a great segue-way to discuss how a budget helps you prioritize needs and wants and set savings goals for each.  

The girls had an interesting dilemma.  They want to save money but they find themselves spending a lot at the school store.  Sherry talked about budgeting strategies for their allowances, and gave them laminated cards with a list of questions to ask about future purchases:  

What to ask when you want to buy something:

  1. Do I need this?
  2. Do I really want it?
  3. How often will I use it?
  4. Have I found the best deal?
  5. Can I get it for free or borrow it?
  6. If I buy it, will I have money left over for other things?
  7. When will I get / earn money next? 


Wow, I can’t say that we as adults have been this mindful of every purchase.  But I love how these questions make you really think about a purchase.   

Here are some more money tips she shared for families with kids:

  • Sit down as a family and make a list of household chores.  Help your kids identify age-appropriate chores that they could do to earn money.  
  • Where does my money go? Help your kids make a poster or worksheet to track what they spent, what they bought, and how much money they have left.  
  • Help your kids set spending and savings goals.  What do they want? (a stuffed animal).  What do they need? (to save for college).   Have them research the cost, and how they could pay for it. Help them create a goal tracking sheet — they write down the goal, how much it is going to cost and set a date to reach that goal.  Then they track how much they have saved incrementally on the same sheet.     

We are so grateful to Sherry for taking time on her weekend to work with the kids.  Summit Credit Union frequently hosts school groups and scouting clubs.  Contact your local branch if you’d like to discuss financial education for your kids, or check out their Project Teen Money

Takeaway for the Week

What is more important than we realized:   teaching kids about money management by talking about needs versus wants.  They really get this concept, and I see it providing a great framework for us to discuss future purchases.

What is easier than we thought:   Summit made it very easy for our kids to open savings accounts.  


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How fun! "Needs vs. Wants" is a very good lesson to learn at young age. Summit has so many great services and events--I love the fact that they cater to the youth as well.

When the kids want something that isn't a need (or a want we want to spend money on) we always say, "it's not in the budget". It makes kids really understand money a lot better. Also, if they have a field trip or like your school store, they need to earn that money in special ways, above and beyond expected chores (helping clean up the kitchen, bringing laundry to the laundry room, helping walk the dog). They don't get allowances but when they want something special, like money for a field trip we sit down and design a special plan to earn a specified amount. It really works for us!!

Nicky, thanks for sharing about how your kids earn money at home. Our kids have allowance -- $1 for each year of age once a month. The job bit is kind of random. We clean and do jobs together -- but it varies a lot from week to week.

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