Is it a need or a want?… How many of us start a financial class with this dichotomy for spending? Not that it’s wrong to do this, but I feel like there’s so much more to the conversation AFTER you’ve established the two ends of the spectrum. As I’ve taught and learned more about personal finance, I’ve realize that most items we spend money on gets a classic “it depends” response when challenged as to whether it is a need or a want for the general public. My goals in class therefore has been to jump on that “it depends” moment and develop our thinking further. What we are really trying to determine is the order in which we would purchase things or services if money had a limited supply (which is does for 99.99% of the world’s population).

I want to take you through the discovery learning activities I do that actually do not result in a concrete answer or definition for where the divide is between needs and wants. Instead, my goal is for students to come out on the other side with an understanding that they need to put conscious thought into their spending since spending on one thing means we cannot spend that same money on another thing. We need to be managers of what we have to reach our personal goals and live the lifestyle we desire.

What would you take to Space?

In the physical education part of my teacher training (did you know I am a certified math, financial education AND PE teacher?) we had a section called Outdoor Adventure Education. I’m not sure if it exists here in the US (I did my undergraduate degree in Ireland), but it consisted of activities like orienteering, kayaking, swimming, etc. One activity that stuck in my mind was a game we would do with elementary school children where we had a bunch of clothing options and they had to dress a person shaped poster for going camping. They could also choose different food to bring or equipment to put in a backpack. It wasn’t formally called needs and wants, but that’s what it ended up being about and I wanted to replicate that experience for my high school students to introduce the idea of needs, wants, and prioritizing items in a particular order.

The activity is called Space Quest. The students are placed into teams (I do this by having the desks arranged into groups of 4 or 5 before they arrive in the room) and once we are ready to begin, I play a video that introduces the task to them.

Of course, there’s no “answer” and every group will make a case for their items based on their prior experiences and priorities for survival. As they arrive close to a conclusion, an alert sounds as a second video message plays. The number of items must be cut to 8. They go back into their groups and try to agree on their 8 items for final presentation.

We then leave our 8 items out on the table and go view the other groups before coming back as a group to debrief and discuss why certain items were picked and others left behind. I ask them to place categories on the items picked and what they are used for, and we see most groups are tending to the same core needs: food, shelter, clothing, safety, and health.

What about real life needs and wants?

Sure, going to space is a very fun activity, but how does it translate to real life in the present day? Are there more need categories? Is it plausible to just focus on survival or are there are spending areas that require attention in a budget? Rather than answering that question, we pull out another activity. This can be in the same class as Space Quest or on a different day. Since emergency drills and assemblies are more frequent in the beginning of a semester, these activities sometimes get spaced out and occupy shorter class periods very nicely!

The activity is a Needs vs Wants sorting activity, where I ask the students to divide all items they are given into either needs or wants. By forcing the students to pick one, it creates create dialog between the groups and I typically see some great debates with arguments for both sides of the line. I ask the groups to identify some of their more controversial items and we discuss as a class. When posed with the question of why it’s a need for some groups and a want for others, we eventually arrive at the conclusion that it is different for every person and many things don’t fit nicely into one category or another. Instead, it should be viewed as a spectrum from core need to frivolous want. Everything fits somewhere on the spectrum and the placement of items will vary based on our situation, values, and goals. If there’s time, I ask students to try to place the items on a spectrum. They can do a line, create different categories, or come up with their own system. A hallway is great for this since it gives them lots of room to spread out!

How do I decide what to prioritize in a budget?

The goal of the course and unit is to equip students with the knowledge, skills, and mindset needed to manage their money in the real world. There’s no substitute for real life practice, but we try our best with different activities and simulations. The next activity I do with the students, builds on the previous Needs vs Wants sorting and challenges students to categorize spending based on urgency and importance. It’s called the Budgeting Matrix and it’s based on the Eisenhower Matrix which gets its name from the 34th president of the United States, Dwight D. Eisenhower, who was quoted saying, "I have two kinds of problems, the urgent and the important. Eisenhower developed a quadrant based tool to aide with decision-making and prioritization of time. We can use the same logic with our money!

Get students into small groups again. 3-5 is the sweet spot where you have enough diversity of opinion that people get  their views challenged, but don’t get lost in the noise of dominant group members. Each group gets 100 items taken from the average American’s budget and must sort them into the quadrants.

Like before, ask the students to note controversial items (hygiene products and gifts always end up in here) to discuss as a class. The final takeaway should come out as:

• Everyone will have different ways of determining what is important, but we all need to pay attention to the urgent and important.

• The important, but not urgent category is often the most important for building wealth in the long term and needs to be viewed as if it were urgent.

• It’s ok to spend on things in the not urgent and not important category, but only if the other categories are being taken care of too.

Put it into practice

I’ve tried a few different simulations for budgeting, including Budget Challenge, Personal Finance Lab, and Stukent. They all have their positives and negatives, with the biggest negative being the cost in most cases. It’s hard to find $15-$45 per student license for a personal finance class that exists in the math department. Core classes such as Algebra, Geometry, Calculus, and Statistics get higher priority when it comes to resource distribution, which makes sense considering the value colleges and state departments place on them compared to personal finance (for now!).

When I was introduced to Cashy by one of the development team and asked to be an early product tester, I was skeptical. Cashy is a simulation which challenges students to build wealth and maintain a level of happiness based on a bunch of decisions impacting their spending, investing, and time. The early versions were a little rough, but I loved involving my students in the process of offering feedback to the developers and giving them the opportunity to shape the direction of the game. They could see their feedback and recommendations being added to the game which was super cool and it helped create the best free simulation on the market in my opinion. That’s right… FREE! Their goal is to keep the simulations free for teachers and students though corporate sponsorships that don’t include misleading ads or poor financial products. I love it and I am hands down an advocate for them without receiving any form of compensation.