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Need or Want?

March 11, 2016

Here’s a great idea

“Most of the things we buy are wants. And we call them needs, but they’re wants.” Dave Ramsey.  Smart money managers know the difference between needs and wants.  They pay for needs before wants.

In other words

It’s important to teach your children the difference between needs and wants. Learning to make smart spending decisions is an important financial management skill. It is the key to financial freedom and worry-free living.

How this applies to you

Need or Want? Everything we buy can be classified into two groups, something we need or something we want. It’s important to know the difference between wants and needs. Needs are basic or necessary to survival. These are things that if not met will jeopardize health, safety or well-being. Young children need assurance that you will provide for their needs. Needs are usually few, but costly. Wants are things that make our lives more comfortable and enjoyable. Wants provide lifestyle. Wants are limitless. For example, we need food, clothing, shelter and physical and emotional care. We need shoes; we want the latest style or several pairs of shoes. There are lots of choices in between. Usually we have fewer needs than wants. However, the things we need such as a place to live and food can cost a lot. Wants are limitless. Grocery shopping provides a good opportunity to discuss needs and wants. Healthy food is a need. We may want soft drinks, chips, or cookies but they are not a need.

To find out more

Kids & Money is a free online course.  Discover easy ways to help your kids learn good money management skills. Go to http://courses.uaex.edu and click on Kids & Money to view this one-hour, video-based course.

The Cooperative Extension Service is your source for reliable, research-based information to improve quality of life. Discover the latest recommendations for creating a spending plan, managing credit, building your savings and investing for the future. Learn more at www.uaex.edu.

By: Laura Hendrix

Photo: Thinkstock

 

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