The ability to identify one’s need and to prioritize needs over wants is one of the most significant lessons in financial literacy for children, that may also be the key to emotional well-being and this must be shaped from a young age. And this is especially important for children with privilege of options and choice. Below is a broad outline of learning objectives in this crucial life skill and an important aspect of developmentally appropriate financial education, which is seemingly important for the money scarce and insignificant for those with abundant money.
Age: 3-5 years
1. Child understands Needs and Wants – that there are some things he needs – somethings he must have for his survival and well-being (physical, emotional, intellectual). And those he does not need but would still want are wants.
2. Having understood that there are needs and wants, the child is able to separate his needs from his wants.
3. The child is able to make choices (not just commercial choices) based on this understanding of needs and wants and their ability to differentiate.
Ages: 6-8 years
1. All above (1-3)
4. Children learn about different needs (based on Maslow’s hierarchy of needs)
5. They realize that getting all one needs is important to be happy and that getting all one wants is impossible
6. They discover that every want has an underlying need which needs to be uncovered and met.
7. They practice to uncover the underlying need beneath a want.
Ages: 9-12 years
1. All above (1-7)
8. Children understand different needs (based on Maslow’s hierarchy of needs)
9. They are able to discus if money is a need or a want and when is money a need and when is it a want?
10. They discover that the basics of money management – earning, spending, saving (& insurance), investing and sharing – are actually ways to provide for our current and future needs and contingencies and also for helping others meet their needs.
11. They practice goal setting – identifying their current and future needs and ways to provide for them using the heads of basic money management.