Financial Literacy—Needs and Wants | Learn about needs, wants, and opportunity costs

As we discussed in the introduction video to this series, deciding between needs and wants can be tough. Financial Literacy—Needs and Wants explains the difference between needs versus wants. But it goes further and describes what opportunity cost is. This will help your kids learn how to make decisions, not between needs and wants, but wants and more wants.

A need, as you now know, is something that is necessary to your survival. Food, water, and shelter are needs because we have to have those things in order to survive. Wants include way more things because there are lots of things in this world that we don't have to have to survive. Toys, games, books, subscriptions to stuff. While it may be hard to decide between a need and want, sometimes it's even harder to decide between two wants.

Opportunity cost relates to decisions between wants. It is basically the cost of missing out on the option you do not choose. The video offers an example in which Frankie Finance has to choose between a pair of rollerblades she has saved up for and going to the movies with her friends. The rollerblades cost more than she has, but there will be a sale to bring down the price to one she can afford.

If Frankie chooses the rollerblades, she will miss out on a movie night with her friends. If she chooses to go to the movie, she will not be able to afford the rollerblades, which will be on sale for one day only. If she doesn't buy them then, she will not be able to get them. There is an opportunity cost tied to each decision. One thing you can do to help you make decisions like this is to create a pros and cons list!

We hope you and your student(s) enjoyed learning about the difference between a need and a want! If you want even more information, head over to our website and download one of our many free lesson plans about financial literacy, full of activities, worksheets, and more!

https://learnbright.org/lessons/math/...
https://learnbright.org/lessons/math/...

What you will learn in Financial Literacy—Needs and Wants:
0:00 Introduction
0:32 Difference between needs and wants
1:39 Opportunity costs
2:01 Example of opportunity cost in action
3:19 How to decide between options

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