Needs vs. Wants: The Golden Rule of Spending
"But Mom, I NEED that LEGO set!"... Do you? Let's help your child spot the difference.
Needs
Things you simply cannot live without.
Wants
Things that make life more fun.
The "3-Question Test"
Next time you are at the store and your child grabs something, ask them to run it through this test:
- Will I still be alive tomorrow if I don't buy this? (If yes, it's probably a want).
- Do I need this for school or health?
- Could I borrow this from somewhere else?
The 50/30/20 Rule for Kids
You can start teaching this adult budgeting concept right now. When they get their PocketJr allowance ($10 for example), suggest this split:
50%
$5 for Needs: Lunch money, school supplies.
30%
$3 for Wants: Video games, candy, toys.
20%
$2 for Savings: The "Do Not Touch" fund.
Put It Into Practice
Activity Idea: Grocery Audit
Take your child grocery shopping. Give them a highlighter and the receipt. Ask them to highlight all the "Wants" (cookies, soda) in one color and "Needs" (milk, bread) in another. It's an eye-opening 10-minute lesson.
Teach Smart Spending with PocketJr
Help your kids practice the 50/30/20 rule with real money management.
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