The end of the summer holidays is just around the corner for millions of kids and the back-to-school shopping could be just the time for parents to get in a few lessons about budgeting.
Many parents will be hitting the shops between now and the start of the new term to buy the uniforms, schoolbags and other accessories for their kids - and the costs can quickly add up.
GreenPath Debt Solutions, a US-based non-profit, says it is the ideal time to teach kids some easy lessons on budgeting and comparison shopping that will help them better understand personal finance.
The back-to-school shop can run into the hundreds, especially for families with more than one child, and although the parents might be sweating, kids can be oblivious to the cost and sacrifice.
"Growing up, many kids think that money comes from the ATM," said David Flores, GreenPath manager and counsellor.
"By sharing a few simple money lessons as you shop, you can help them gain a better understanding as to how a budget and money works.
"These lessons can better prepare them for other financial decisions they encounter during the school year, whether it's in the classroom or the lunchroom."
Here are some suggestions from GreenPath:
- Together, you and your child should build a budget to plan much you will spend this year. This amount can vary from child to child, based on first conducting an inventory of what you have on hand, including last year's supplies and accessories (backpacks etc).
- Together, shop the sales smartly. Point out to your child that many stores sell items like crayons or spiral notebooks at very low cost, in order to get you in the door for bigger items. Remind them that if you go to a store for an inexpensive notepad, you shouldn't be tempted by other sale items that don't fall within your approved budget.
- For pre-teens, consider letting your kids take the lead in purchasing one new outfit for the first day of school, based on a set amount of money available from your budget. Let them choose the outfit and then determine if they can buy accessories like a new belt, socks or shoes, to complement the outfit.
- For responsible teens, you may want to turn over the spending reins completely. Back-to-school shopping is a great way for teens to experience decision making powers and a chance to hone their money skills.
"Depending on your teen's maturity level, consider giving them a lump sum as their back-to-school money to spend," said Flores. GreenPath has set up a teen budget sheet to help teens build a budget and track weekly spending here
- Involve your child in how you will pay for the purchases. Will you pay cash or use a debit card? Will you use a credit card that you will pay off in full next month? Remind them that carrying over a credit card balance month-to-month can drive up the balance even more with interest fees and late fees.
"By sharing a few scenarios with you child, you can help them become more money-savvy this school year," said Flores.
