In a child's mind every desire might be considered a need. Help your child understand the difference between his or her needs and wants, and how to make the distinction. This is a critical skill to master as children begin managing their own money.


Ask your child all the things he or she needs and list them on paper. Then go back and work through each listed item, explaining which ones are actual needs and which ones are merely wants. Highlight the needs in one color and the wants in another color to help keep track. Be sure to explain why each item receives the classification of Need or Want.