Free lesson · Lesson 7 in the app
Needs vs Wants: The First Money Skill
How to tell a need from a want, and a 10-second test to use before you buy.
About 9 minutes · 10-question quiz · Ages 10 and up
Learn
You get home from school starving. You NEED a snack right now, or you'll die.
Except... you won't. You'd be hungry until dinner, but you'd be perfectly fine.
We use the word "need" all the time. "I need the new phone." "I need those trainers." "I need to go to that concert."
Most of those aren't really needs at all. Learning to tell a real need from a want is the first money skill, and one of the most useful you'll ever learn. Plenty of grown-ups still find it tricky.
What is a need?
A need is something you require to survive, stay healthy and function, which means getting on with everyday life, like going to school.
The list is surprisingly short:
- Food and water, to keep you alive
- Shelter: a safe, dry place to sleep
- Clothing: enough to keep you warm and ready for school
- Healthcare: help when you're ill or hurt
- Basic transport: getting to school, or one day to work
That's about it. Everything else is a want, even the things that feel very important.
Wants in disguise
Wants are sneaky, and they love dressing up as needs.
Your brain is brilliant at finding reasons:
- "I need this game, because all my friends have it." (You want to fit in.)
- "I need a new phone. Mine is so slow." (You want something quicker and nicer.)
- "I need new trainers for PE." (Your old ones still work. You want the look.)
None of these would harm you if you went without. They feel like needs because you want them so badly.
You can still buy wants. Spotting the disguise means being honest with yourself about what they are.
Which comes first
A good order for your money is:
1. Needs first: cover the essentials.
2. Savings second: put some aside for yourself before the fun stuff. This is known as paying yourself first.
3. Wants third: enjoy what's left.
Lots of people do it the other way round: wants first, needs next, savings never. Then they wonder why their money always runs out.
With pocket money, you may not have many needs to pay for yet. But you can already practise saving before spending on wants, and the habit tends to stick for life.
The 10-second test
To tell a need from a want quickly, ask yourself one question before you spend: "What happens if I don't buy this?"
- •If you'd be disappointed but fine, it's a want.
- •If you couldn't get on with everyday life, it might be a need.
Be honest with yourself here: would you really be stuck, or only a bit fed up?
Nobody's asking you to give up wants. A life with none at all would be miserable. What matters is choosing them on purpose instead of fooling yourself.
Why this matters for your future
This skill matters more as you get older and the bills get bigger.
Adults who can't tell needs from wants often end up in debt from wants they couldn't afford. Some are stressed about money even when they earn a good wage.
Adults who have the skill tend to feel in control. They save without feeling they're missing out, and they enjoy their wants more because they chose them.
Learning it now, before you have any real bills to pay, gives you a big head start. By the time you earn your own money, it will feel automatic.
Practice
No marks here. Have a think, or talk it through, then open a model answer.
The sorting challenge
Sort these into needs and wants:
1. Lunch at school
2. A Netflix subscription
3. A warm coat for winter
4. The latest games console
5. Bus fare to get to school
6. Branded trainers (when your shoes still work)
7. Toothpaste
8. Concert tickets
Question: Which are needs, and which are wants?
How does knowing needs from wants help you with money?
The upgrade question
Your phone works fine, but it's two years old. A new model has just come out with a better camera and more speed.
You tell yourself: "I NEED to upgrade. My phone is too slow."
Question: Use the 10-second test. Is this a need or a want?
Try the quiz
Pick an answer to see if it's right, and why.
Question 1 of 10
What counts as a need?
Question 2 of 10
Which of these is a need?
Question 3 of 10
True or False: "I need these trainers because all my friends have them" is an example of a real need.
Question 4 of 10
What is the smart priority order for money?
Question 5 of 10
What is the 10-second test for telling needs from wants?
Question 6 of 10
True or False: Understanding needs vs wants means you must never buy anything you want.
Question 7 of 10
Why do wants so often feel like needs?
Question 8 of 10
What often happens to adults who can't tell needs from wants?
Question 9 of 10
Which is NOT on the needs list?
Question 10 of 10
Why is learning needs vs wants while you're young an advantage?
10 questions. Nothing is saved, so have a go.
Where a lesson mentions another lesson by number, the free ones are linked. The rest are in the app.
Keep going in the app
In Squids-In, children work through 160 short lessons like this one, in order, alongside a friendly investing game. You can see how they're getting on. It's free while we test it with a small group of families.