Teaching Kids About Money: 4 Questions to Master the "Needs vs. Wants" Shopping Lesson

In modern families, differences in financial values between couples often spark quite a bit of friction. These seemingly trivial disagreements actually hide important opportunities to teach kids about money management. Through everyday shopping decisions, we’re not only meeting immediate needs but also subtly communicating our attitudes and values about money to our children.

The Nature of Spending: Meeting Needs or Satisfying Desires?

During a conversation with a friend, he was complaining about his wife buying toys for their kid. His wife had taken their child to a secondhand market, where part of the market featured a dazzling array of used toys. Although the child hadn’t asked for any toys, his wife spotted a toy set originally priced at NT$2,000, marked down to just NT$200. She bought it on the spot with that “what a bargain!” or “what a steal!” rationale. This left my friend feeling a bit helpless, because the purchase seemed to satisfy the adult’s desire for “scoring a deal” rather than the child’s actual needs.

Spending Without Real Purpose Easily Leads to Waste

After the toy was brought home, of course the kid had a blast playing with it, and the adults enjoyed playing along too (after all, it was the adult who wanted to buy it…). And then what happened next? Well, nothing happened next. That secondhand toy was happily “sampled” a few times and then found its way to a corner — because a new Qiaohu (巧虎, a popular Taiwanese children’s educational brand, similar to Sesame Street) learning kit had arrived, and the kid moved on to the new toy. So that NT$200 wasn’t just a NT$200 problem — it was a case of genuine waste. It’s like buying a NT$200 toy you play with “3 times” being essentially the same as spending NT$200 at Tom’s World (湯姆熊, a popular arcade chain in Taiwan) to play 3 arcade games.

4 Questions to Teach Kids the Difference Between “Necessities,” “Needs,” and “Wants”

As parents, our spending decisions and values have a profound impact on our children. In daily life, when kids express their “wants” to us, we have the opportunity to teach them how to distinguish between “wants,” “needs,” and “necessities.”

Whenever my child brings up something they “want,” I try to guide them through a series of questions that reveal the underlying logic:

"What can you do with this?"

"What happens if you don't have it?"

"So if you get it, what will you do?"

"And if you can't get it, what will you do?"

Of course, throughout this process, we parents weave in our own perspectives as we interact with the child, and the child can also express their various reasons and purposes through this conversation.

Communication Between Couples: Building Shared Financial and Educational Values

When couples have friction over money, the root issue is often not the money itself, but the values it represents. Through open and honest communication, couples can build shared financial and educational values. This not only reduces unnecessary friction but also ensures consistency and effectiveness in family education.

Moving from having no standards for earning and spending to establishing a standardized family financial statement, family cash flow statement, or even a family budget, are all methods that can reduce friction and improve household financial efficiency.

Further Reading

Lazy Conclusion

懶大

金融科技新創 CEO | 獨立財務顧問

As my friend experienced, teaching kids about money isn’t just about how much or how little — it’s about using the little moments in everyday life to teach children the value of money and cultivate responsible spending habits and healthy values. Let’s start with the small things at home and together build a solid foundation for our children’s future.

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