You need a cup of coffee, and you want a triple-grande-mocha-two-splenda-latte. Your son needs a new baseball bat, but wants the new-edition bat that all the kids have. Your daughter needs some new school clothes, but she wants those designer jeans. Let’s face it. The line between a ‘need’ and a ‘want’ can be pretty gray, for kids and adults alike. You’ve probably experienced a child dramatically (and possibly in tears) exclaim, “But I NEED it!” over something that has made you laugh or even cringe a little. The good news is that we can help our children understand the difference between a ‘need’ and a ‘want’. And they’ll be better for it. To introduce the concept and initiate the conversation, start with this exercise:

1. Basic needs. Make a list of your family’s basic needs. Typically this list will include such things as shelter, transportation, clothing and food.
2. What fits? As a group, talk about the items that fit into these categories. For younger children, consider having them draw or cut-out pictures from magazines or catalogs. What do we need to grow strong, stay safe and function well at home and school?
3. What do we want? Now talk about things that are nice to have, but don’t necessarily fit into the ‘need’ category. Bikes are fun, but do you need it in order to get to school? Perhaps a coat falls into the need category, but does the coat have to be pink to keep us warm? It’s fun to go on vacation, but will something bad happen if we don’t go?
4. Ongoing conversation: Needs before wants. Talking about finances can be uncomfortable, but if we don’t include our children in the discussion, they will not be aware. Be sure your children understand that you have to take care of your needs before you can focus on your wants. This means, groceries before iPads and gasoline before Disney World tickets.

By setting expectations about what is truly needed vs. what we simply wish for and ensuring that our children are aware of how we prioritize expenses, we are more likely to raise children that will make smart financial decisions, appreciate the ‘nice to haves’ in life, and have a deeper understanding of the needs of others.