FAMILY FINANACE: How to Teach Your Child the Difference Between Needs and Wants
Episode 2: The Art of Self-control
By Dr. Mayowa Olusoji, The Money Smart Coach
Last week, we established that money is a tool. But owning a hammer does not make you a master builder. You have to know how to use it and, more critically, when not to swing it.
This week, we tackle the most fundamental and most violated rule in personal finance: the difference between a Need and a Want. And before you think this is a lesson only for children, most adults have not mastered it either.
In the 1970s, Stanford University ran what became one of the most cited studies in behavioural science. A child was placed in a room with a single marshmallow and a choice: eat it now, or wait and receive two. Researchers then followed those children for four decades. The ones who waited went on to achieve better academic results, stronger health outcomes, and significantly higher financial stability as adults.
That simple marshmallow experiment is playing out in your home every single day. Every time your child screams, “But I NEED it!” at a toy shop or a supermarket aisle, they are reaching for the first marshmallow. Your response in that moment either reinforces the habit or begins to rewire it.
The distinction is straightforward but powerful:
Needs: essentials for survival, safety, and health. Food, shelter, clothing, medicine.
Wants: things that enrich life but are not essential. Treats, brand-name items, and entertainment.
Here is where most parents stumble: shoes are a Need. Designer trainers are a Want. Food is a Need. Pizza delivery is a Want. The category matters, and so does the conversation around it.
When your child asks for something this week, resist the instinct to say no immediately. Instead, pause and ask: “Is this a Need or a Want?” Let them reason through it. If it is a Want, validate it, “I understand why you want it”, and add it to a “Later List.” This simple habit acknowledges desire without rewarding impulse, and it teaches delayed gratification without creating shame around wanting things.
This week’s challenge: The Grocery Audit
Pull out a recent grocery receipt. With two highlighters, go through it line by line, yellow for Needs, pink for Wants.
Then ask: “If we needed to save £20 next week, which pink items go first?” The answer will teach them more about priorities than any lecture ever could.
Dinner table question this week:
“If you were stranded on a desert island, what are the three Needs you cannot survive without and the one Want you would miss the most?”
The goal is not to raise children who never want anything. It is to raise children who know the difference and choose wisely.
Dr. Mayowa Olusoji
The Money Smart Coach
See you next week Saturday, Kindly turn on your notification for this website, so you don’t miss any episode. Have a lovely weekend.
