Call it peer pressure or overexposure to technology and information, we often see our children, mostly teenagers, always pestering their parents to buy this or that. Whether it is a newly launched gadget or an advanced game console, or a pretty dress, our children are seldom out of their ‘I Want’ mode.
As parents, we meet most of their demands; partially because we want to compensate for the time we didn’t give them, and partially due to our own desire to give our children all they want.
But beware! If we do not teach our children to curb their wants now, we are preparing them to be financial disasters as they grow up.
Teachers and parents, both, must teach the young generation to distinguish between needs and wants.
Studies show that teenagers in India are increasingly spending their money on apparels, eating out in fancy restaurants and cafes and gadgets. Brand obsession, seemingly irresistible online deals and social media-induced identity crisis continually prompt youngsters to spend more and more money. As a result, they keep buying things they hardly need and have no financial discipline.
Teachers have the power to influence their students’ minds. Hence, there is a great opportunity for the teachers to help their students learn the concept of ‘need vs want’ and motivate them to embrace financial discipline from an early age.
How to teach students to distinguish needs from wants
Here are a few fun exercises through which students will learn to introspect and understand the difference between wants and needs as well as the benefits of being financially independent:
- Life-Goals Vs Material Wants
Young students have a fair notion of what they want to do in their lives. Ask students to write down their key life goals on the left column of a table. Now, on the right column, ask them to list down the top things they want to buy in their lifetime. Ask them to match both and find out how their wants will help them fulfil their life goals.
- Wants vs Needs Game
The popular online game – Needs vs Wants (http://www.myfloridacfo.com/mymoney/games/needs-vs-wants-game.html) can be emulated in a classroom setting. The simple questions asked in the game help children distinguish between needs and wants. This seemingly simple exercise will have a long-lasting impact on the students’ minds and will help them make better financial decisions as grownups.
- Make a model family budget
The reason why students may not effectively distinguish between needs and wants can be their ignorance about the concept of ‘limited means’. Parents often do not discuss their financial situation with their children – to shield them against any sort of insecurity or stress. However, children who have no clue about how much their family can spend on needs and wants, tend to think that there is always enough to spend on needs as well as wants. Teachers can introduce the concept of budgeting and rational expenditure through a model family budget. Giving students a chance to better manage the budget would be a great learning opportunity for students.
- Teach them how to grow the money plant
Putting your students completely off their desires and wants may not be possible. Hence, it is best to teach them the concept of delayed gratification. Also, introduce them to the concept of “Time = Money with Compounded Benefits”, which means that if invested wisely and regularly, say in good mutual funds through SIPs, over a period of 10 years or more, the money can grow manifold, giving students an opportunity to buy what they ‘want’.
- Real Life Stories
Stories are a time-proven and fun way of imparting morals and values to children. Narrate real-life stories to students where people have gone from ‘riches to rags’ owing to their bizarre spending habits or poor money management. Each of us dream of the untold riches, and we all cringe and get affected when we hear a story of a multi-millionaire losing everything and living in poverty. We learn our lessons from real stories.
The road to financial freedom
We see money as the root cause of many evils because we choose to be a slave to money. But by curtailing our wants and inculcating the habit of regular investments, we can change this equation and be financially free. The first step to reach financial independence is distinguishing needs from wants, and our teachers can contribute significantly in this area.