Help Youth Make Better Money Choices
Money can be tough to manage, especially when you’re just starting out on your own. For youth aging out of foster care, the transition to independence often comes with big financial decisions, like paying rent, buying food, or figuring out how to budget for fun. One of the best tools for making smart money choices is learning the difference between needs and wants.
At Impact Living Services, we believe financial skills are just as important as life skills. Knowing how to manage your money wisely can help you build stability, reach your goals, and feel more confident about the future.
What Are Needs?
Needs are the essentials you must have to live safely and stay healthy. Without these, your basic well-being would be at risk. Examples include:
- Housing (rent, utilities, basic furniture)
- Food and groceries
- Healthcare (doctor visits, prescriptions, insurance)
- Transportation (bus pass, gas, car insurance)
- Basic clothing
Think of needs as the “non-negotiables” in your budget. These expenses should always come first when you plan how to spend your money.
What Are Wants?
Wants are the extras that make life enjoyable but aren’t essential to survival. Examples include:
- Eating out at restaurants or ordering delivery
- New clothes or shoes you don’t actually need
- The latest phone, gaming system, or subscription services
- Vacations or trips
- Concert tickets or entertainment splurges
Wants are not bad! It’s okay to enjoy your money! But the key is to prioritize needs first and then use what’s left over for wants.
How to Tell the Difference
When you’re not sure if something is a need or a want, ask yourself these questions:
- Do I need this to live safely and stay healthy?
- What would happen if I didn’t buy this?
- Is this a short-term desire or a long-term necessity?
For example:
- Paying rent = Need
- Upgrading to the newest iPhone = Want
- Buying groceries = Need
- Ordering takeout instead of cooking = Want
Tips for Making Better Money Choices
-
Create a Budget
List your monthly income and expenses. Cover all your needs first, like rent, utilities, and groceries, before planning for wants. -
Use the 50/30/20 Rule
- 50% of your money goes to needs
- 30% goes to wants
- 20% goes to savings and paying off debt
- Practice Delayed Gratification
If you really want something, wait a few days before buying it. You might realize it’s not worth the money after all. - Set Financial Goals
Saving for a car, building an emergency fund, or planning for school are all great motivators to spend wisely. - Look for Cheaper Alternatives
Cooking at home instead of eating out, buying used instead of new, or sharing subscriptions with a friend are simple ways to save money without missing out.
Building a Strong Future
Managing money isn’t about never having fun, it’s about making choices that give you stability and freedom in the long run. By learning to separate needs from wants, you’ll be better equipped to avoid debt, reduce stress, and move closer to your personal goals.
At Impact Living Services, we’re here to support youth aging out of foster care as they gain the skills needed for independence. Financial literacy is just one piece of the puzzle, but it’s a powerful tool for building a strong foundation for the future.
Our Independent Living Program helps youth with real-life skills like budgeting, job readiness, and goal-setting. Learn more about how we support youth on their journey to independence.