Needs and wants

In this learning activity, you will learn about earning and spending habits, and how spending money is related to earning money.

Spending

All human beings have basic needs such as water, food, oxygen and shelter. Once these basic needs are met, humans can then move towards focusing on things they want now or in the future.

At the moment, someone has the responsibility to provide you with items referred to as “social security items” such as food, shelter, clothing, heat, and electricity.

All of these items cost money. This means that someone has to spend money to afford these items.

Each time an individual makes a purchase or a payment, they make a decision to spend their money. They also often choose how they make a purchase, which means what method of payment they will use.

How do we make purchases?

There are ways of making purchases that have not existed for long, such as:

• tap on debit and credit cards
• using smartphones or computer apps
• business or store credit cards
• prepaid credit cards

There are ways of making purchases still used today that have existed for a while, such as:

• cash
• credit cards
• debit cards
• cheques

The person making the purchase is often called the customer or the consumer. They make their own decision to pay (or agree to pay later if using a credit card) for a good or a service.

This means the customer or consumer has to have the money to be able to spend in order to make purchases.

How individuals spend their money depends on some factors. Everyone is different because everyone has different lifestyles, life circumstances, incomes, bills, values, and wants.

Spending on food

Food is a basic need for everyone. The lifestyles around food and amounts of food that different people purchase and eat can be very different.

For example, people cook at home, eat out, or buy pre-made made meals (some people do a combination of all three). All three options have their place. Sometimes, we will eat out or buy pre-made meals because we’re short on money and time. Other times, we will want to cook at home as a family. Our needs and wants overlap.

Spending on health

Individuals with health conditions may require medications or medical devices to support their health. This would fall under a need, or a required expense.

Life circumstances

A person who is a parent/guardian of children has additional responsibilities as their children depend on them.

An individual with a newborn baby will have expenses for baby items like diapers, baby food, baby bottles, baby formula, baby wipes, baby clothes, a stroller, baby toys, and a highchair.

People with children will have expenses related to caring for and providing for children. Children grow quickly and require clothing that fits, such as socks, shoes, pants, shirts, pyjamas, coats, and boots.

Some individuals may support and assist in paying for their life partner’s, parents’, or siblings’ expenses.

Where a person lives and how much space they occupy can also determine how much they pay for living there.

The age of a person can also affect what they spend, and how much they spend.

Incomes

How much a person spends is usually determined by the amount of money they earn in their job.

How much a person spends, when they spend it, and what they spend it on varies from person to person.

Scenario

The following scenario includes Rick and their monthly expenses. Using the information, determine how much money Rick has to spend each month on expenses. Make a list of all the expenses Rick can afford for one month.

Rick’s earnings in one month: $2,500.

Rick’s monthly expenses are listed in the following chart:

Approximately how much does Rick have left after their expenses?

Which of these options would you choose for Rick after these expenses? What can Rick afford?

• If Rick wants to go to a movie, they have a choice of a regular adult ticket for $13 or the afternoon matinee for $7. Should Rick go to the movies?
• Rick loves their cat. Could Rick possibly afford to purchase something else for the cat?
• If Rick wanted to spend some time with a few friends, does Rick have any money to do something that might cost money? What could Rick do?

If you could speak to Rick about their needs, wants, and spending money, what might you tell them?

Reflection

As you read through these descriptions, which sentence best describes how you are feeling about your understanding of this learning activity? Press the button that is beside this sentence.

Now, record your ideas using a voice recorder, speech-to-text, or writing tool.