📖 Chapter 3 of 11 · Smart Money Basic (Multi Indian Language) · Class 4–7
Chapter 2 · Needs and Wants (Recap)
In your earlier classes, you learnt that the things we buy with money fall into two big groups — needs and wants. Telling them apart is the very first secret of using money wisely.
What is a NEED?
A need is something we cannot live without. Food, clean water, a safe home, clothes, medicines when we fall sick, and an education to grow up well — these are needs. If we do not have them, our health, safety or future is in trouble.
What is a WANT?
A want is something that makes us happy but is not necessary for living. An ice-cream cone, a fancy toy, a video game, a new pair of designer shoes when our old ones still fit — these are wants. There is nothing wrong with wants! But we must spend on needs first, and on wants only after.
Story Time — Riya's Birthday Wish
The Patel twins · Ahmedabad, Gujarat
Riya Patel of Ahmedabad was turning eleven. Her parents asked her, “What would you like as a birthday gift?” Riya's eyes lit up. “I want a smart watch like my friend Aanya's — it costs ₹4,500!”
Her father smiled and said, “Beta, before we decide, let me ask you something. Is this a need or a want?” Riya thought hard. “It's a want, papa. But all my friends have one!”
“Fair enough,” her father said. “But our family's monthly grocery bill is also about ₹4,500. That's a need for all four of us, for one whole month. Now, would you still want the watch, or would you choose something smaller?”
Riya was quiet for a while. Then she said, “Papa, can I get a nice wristwatch for ₹800 instead, and you save the rest in my account?” Her father hugged her. “That, my dear, is the smartest birthday wish I have ever heard!”
Solved Examples
Think first, then read the answer!
1. Classify as Need (N) or Want (W): (a) drinking water, (b) chocolate, (c) school uniform, (d) video game, (e) medicine, (f) movie ticket.
Show answer
Answer: Drinking water → N (we cannot live without it). Chocolate → W. School uniform → N. Video game → W. Medicine → N. Movie ticket → W. So Needs: a, c, e. Wants: b, d, f.
2. Anjali has ₹500. Her needs for the week add up to ₹350. She really wants a comic book that costs ₹200. Can she buy the comic? What is the
Show answer
Answer: Money left after needs = ₹500 − ₹350 = ₹150. The comic costs ₹200, which is more than ₹150. So she should pay for needs first and save the leftover ₹150 towards the comic, and buy it next week.
3. Is a mobile phone a need or a want?
Show answer
Answer: It depends on who is using it and why! For a school student to play games, it is mostly a want. For a doctor on emergency duty, it is clearly a need. The same item can be a need for one person and a want for another. Always ask “why do I need this?”
4. Sort into Needs and Wants for a family: rice, perfume, school books, jewellery, soap, fancy curtains.
Show answer
Answer: Needs: rice (daily food), school books (education), soap (hygiene). Wants: perfume, jewellery, fancy curtains (all decoration or extra).
Check Your Understanding
Q1. Define need and want in your own words.
Q2. Why should we spend money on needs before wants?
Q3. Give two examples of needs and two examples of wants from your own daily life.
Q4. Suppose you receive ₹300 as a gift. Plan how you would divide it between needs, wants and savings.
Q5. Was Riya's final decision wise? Give one reason.
Check your understanding — Chapter 2
Tap an answer to check it instantly. These are for practice — nothing is saved or sent.
Q1. Which of these is a NEED?
- A video game
- Clean drinking water
- An ice-cream cone
Show answer
B. Clean drinking water
Q2. What should we spend on first?
- Needs first, then wants
- Wants first, then needs
Show answer
A. Needs first, then wants
Q3. Can a mobile phone be both a need and a want?
- Yes — it depends on who uses it and why
- No — it is always a want
Show answer
A. Yes — it depends on who uses it and why