Riddhima Kapoor Sahni Writes About Teaching Kids The Value Of Needs vs Luxuries

One of the most valuable life lessons you can teach your child—whether they’re in preschool or high school—is the difference between needs and luxuries (or wants). In an age of instant gratification, where a click can bring a toy to your doorstep and peer influence is just a scroll away, helping your child distinguish between what is essential and what is desirable is key to raising financially responsible adults.

The difference between wants and needs is all about prioritising. Needs are the basics required to survive and stay healthy—food, water, clothing, shelter, education, and healthcare. Luxuries or wants, on the other hand, are things that are nice to have but not essential. A pair of jeans is a need. But a pair of the latest branded jeans? That’s a want.

Start early. When your young child pesters you for a small, affordable item at the store—a flashy pencil case or another set of stickers—it’s tempting to give in. But this is also a great moment to teach. Saying “no” isn’t being mean. It’s helping them understand that not every desire can be fulfilled immediately. And, more importantly, it gives you the chance to talk them through the why. Explain to them gently that while the item is fun, it isn’t something they need. They already have a working pencil case or enough toys. Let them know that sometimes we have to make choices, and it’s okay to wait.

The same principle applies—though with a little more tact and patience—to older kids. As children move into their teens, peer pressure and social influence can make them feel that they must have certain things to belong or feel accepted. This could be the latest phone, trendy clothes, or expensive gadgets. Here, instead of an outright “no,” try turning it into a conversation about choices and responsibility. Ask them: Is this something you really need, or something you just really want? If it’s a want, can you save up for it using your allowance or pocket money? Can they contribute partially toward it?

Encouraging teens to save for their wants gives them a sense of ownership and teaches them the satisfaction of working towards something they desire. It also shows them that luxuries aren’t always handed to you—you have to plan and prioritize for them.

Riddhima Kapoor Sahni Writes About Parenting In The Digital Age: Should You Monitor Your Teen’s Social Media?

Another useful exercise is to involve your kids in basic family budgeting. You don’t have to go into exact numbers, but you can talk to them about how the family decides what to spend money on—like groceries, bills, school fees—before spending on vacations or treats. It demystifies money and shows them how adults make financial choices.

Of course, none of this works unless parents practice what they preach. Kids are keen observers. If they see you making impulsive purchases or talking endlessly about expensive indulgences, they will pick up those habits too. On the other hand, if you’re mindful about your own spending, talk openly about financial decisions, and demonstrate restraint when necessary, your children are more likely to mirror that behaviour.

Ultimately, teaching your children the difference between a need and a luxury is about instilling financial discipline, critical thinking, and empathy. It's not about denying them things—it’s about helping them make better decisions. When they learn to pause and ask, “Do I really need this?” you’ll know the lesson has landed. And that’s one skill that will serve them for life.

(Riddhima Kapoor Sahni is a jewellery designer, and daughter of veteran actors Rishi Kapoor and Neetu Kapoor)