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Financial literacy activity

Wants vs Needs Sort

Sort picture cards into two groups: things we NEED (food, water, home) and things we WANT (toys, candy, games). Learn the difference!

DiscussionAbout 30 minutesMay use a screenParent help expected

Materials and setup

How this changes by age

Pre-K (ages 3–4)

Sort picture cards into two groups: things we NEED (food, water, home) and things we WANT (toys, candy, games). Learn the difference!

Difficulty 1 of 3

Steps

  1. Draw or cut out pictures of various items: food, house, water, toys, candy, video games, clothes, medicine.
  2. Make two piles labeled 'NEED' and 'WANT.'
  3. Hold up each picture: 'Do we NEED this to be healthy and safe, or do we WANT it because it's fun?'
  4. Child sorts each card with help and discussion.
  5. Review: 'Needs keep us healthy and safe. Wants make us happy but we can live without them.'

Learning objectives

  • Distinguish between basic needs and wants
  • Categorize items into needs vs. wants with reasoning
  • Understand that needs are essential for health and safety

Kindergarten (ages 5–6)

Sort items into needs vs. wants, then discuss tricky cases. Is a bike a need or want? What about winter boots? Practice making spending decisions.

Difficulty 2 of 3

Steps

  1. Sort a larger set of cards into needs and wants.
  2. Discuss tricky items: 'Is a phone a need or a want? It depends!'
  3. Scenario: 'You have $10. You NEED lunch ($5). You WANT a toy ($8). What do you buy?'
  4. Practice prioritizing: put 5 wants in order from most to least important.
  5. Discuss: 'Sometimes we have to wait and save for wants. That's okay!'

Learning objectives

  • Analyze ambiguous items and argue whether they are needs or wants
  • Practice prioritizing spending when resources are limited
  • Understand that financial decisions involve trade-offs

Early elementary (ages 6–8)

Create a family budget simulation! Given a pretend monthly income, allocate money to needs first, then decide which wants to include. Practice trade-offs and prioritization. (Note: the dollar amounts in this activity are simplified PRACTICE numbers — real-world rents, groceries, and bills cost a lot more. You'll work with real numbers at the next age level.)

Difficulty 2 of 3

Steps

  1. Set up a pretend monthly income of $500 (play money or on paper). These are simplified numbers — real costs are much higher, but the math logic stays the same.
  2. List necessary expenses (needs): rent $200, food $100, electricity $30, clothes $20. Subtract these first.
  3. With the remaining $150, list 8 possible wants with prices: movie $15, new game $40, eating out $25, etc.
  4. Decide which wants to include in the budget. Can you afford them all? What must you skip?
  5. Discuss opportunity cost: 'If you buy the game, you cannot afford the movie AND eating out. Which matters more to you?'
  6. Write a final budget on paper with all choices and the remaining balance.

Learning objectives

  • Create a simple budget by allocating income to needs before wants
  • Understand opportunity cost — choosing one thing means giving up another
  • Practice prioritizing wants within a fixed budget
  • Calculate remaining balance after multiple expenses

Upper elementary (ages 8–10)

Analyze a realistic family budget with income, fixed expenses, variable expenses, and savings goals. Practice trade-offs using adult-supervised estimates rather than pretending to know a real family's private finances.

Difficulty 3 of 3

Steps

  1. Research sample costs in your area: average rent or mortgage, grocery costs, utility bills, gas, and insurance. Use parent help and treat these as estimates, not your own family's private numbers.
  2. Given a realistic monthly income, create a detailed budget spreadsheet with categories: Housing, Food, Transportation, Utilities, Savings, Entertainment, Clothing, Education.
  3. Allocate every dollar. Follow the guideline: needs should be about 50%, wants about 30%, savings about 20%.
  4. Introduce a surprise expense: the car needs a $300 repair. Where does that money come from? Adjust the budget.
  5. Discuss: What is an emergency fund? Why is it important? How much should a family save?
  6. Present your budget to your family, explaining the reasoning behind each allocation and one trade-off you had to make.

Learning objectives

  • Research and use real-world cost data to create a realistic budget
  • Apply the 50/30/20 budgeting guideline to allocate income
  • Adjust a budget to handle unexpected expenses and trade-offs
  • Understand the importance of emergency funds and long-term savings

Safety and evidence note

Read the full activity before beginning. An adult should supervise tools, heat, food, outdoor work, movement, and experiments as appropriate. Completion records that the activity was done; the child’s explanation, work sample, photo, or demonstration is stronger evidence of learning than a completion check alone.

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