What your kids need to know about needs versus wants
As parents, we all naturally want the best for our children. As part of this, you likely want them to develop good money habits that will set them on the path to a solid financial future.
But where do you even begin?
A good place to start is to teach your child the difference between needs and wants.
After all, once money is spent it’s gone. So understanding the difference between a need and a want – and the sometimes fine line between the two – is key to helping your kids learn crucial money management and budgeting skills.
This should get them thinking about the power of delayed gratification and the benefits of choosing a long-term reward over short-term thrills.
What’s the difference between needs and wants?
Needs are essential to our day-to-day life; think food, water and a place to call home. By contrast, wants are the nice-to-haves you can live without – so that could be anything from designer clothes and a new smartphone to toys and lollies.
How to teach kids the difference between wants and needs
Needs versus wants can be a complex concept for kids to grasp, particularly if your children have friends that seemingly get everything they want.
That said, many people learn best by doing. So a good way to teach them the difference is to take your child shopping. Before you hit the shops, explain how your family budget influences your choices and get their help to draw up a list. When you’re in the store, ask their opinion on the things you buy – getting them to define if it’s a want or a need.
Have your children use their own money
Once your children understand the difference between a need and a want, reinforce it by letting them make their own decisions when spending their hard-earned cash.
You can do this by setting up automatic pocket money transfers from your Flexischools wallet to your child’s FLX prepaid card and savings app. Your child can then use this money to pay for all their wants (while you still cover their needs).
This way, they will soon learn the consequences of spending their money too quickly. This should teach them how to prioritise their wants and understand the value of saving.
To further encourage this, kids can use the FLX App to set savings goals for big-ticket items such as a bike or computer game.
You’ll also receive a Flexischools app notification every time your child buys something with their FLX card. You can use these notifications as starting points for further discussions on needs versus wants.
Want your kids to learn money management skills? Join FLX here. FLX links to your Flexischools account, so you can track how much they’re spending vs. saving.
This is general advice. Read the PDSs & TMDs at www.flexischools.com.au/legal before deciding if FLX is right for you. The FLX Services & Flexischools are provided by InLoop Pty Ltd ABN 27 114 508 771 AFSL 471558 (trading as Flexischools). The FLX Prepaid Mastercard is issued by EML Payment Solutions Limited ABN 30 131 436 532 AFSL 404131 pursuant to license by Mastercard Asia/Pacific Pte. Ltd.