Before the age of school uniforms, my daughter’s middle school girlfriends were wearing a designer brand of jeans. Not wanting to be different, my daughter wanted five pair of those jeans so she could wear a different pair to school each day. We priced them at a local department store and found they cost $100 per pair. Our family’s budget could not afford the cost of that back-to-school fashion. Rather than disappoint her totally, I called several discount department stores and found one that had that brand discounted for less than $25 per pair. We shopped there, bought two pair that fit her, and that fall I washed one pair while she wore the other. As it turned out, the fad for that brand did not last the whole semester, so two pair were enough. By comparison shopping, I had demonstrated to my daughter how we could save $450.
Actually, back-to-school is a great time to talk to your kids and teach them about money. You may not feel completely comfortable doing this, but it is not as hard as you might imagine. Even if you don’t think of yourself as a good money manager, you can begin to teach your children and learn more yourself in the process. There is no better way to learn something than by having to teach it, especially to your children. You can start small and keep it easy. If you are in a grocery store shopping for school supplies with your child, show him or her how to compare unit prices for something the child needs, like a pack of pencils, or wants, like cereal or a snack. Different brands and packaging have different prices. Show your child how to calculate the cost per pencil or how to compare the cost per serving of cereal A with cereal B. All the information you need is right on the package. Take a pocket calculator with you if that makes it easier for you and your child. Make comparison shopping fun and interesting. This is good math skills practice, too! Show your child the cash register receipt so he or she can see the items and prices.
You can teach your children how to save. Take them with you to the bank or credit union you use to open savings accounts in their names. Encourage your children to save their cash gifts, allowance or earnings from babysitting or other jobs. Get them comfortable with filling out deposit slips and reading monthly statements. Check their monthly statements with them to show them how their savings grows and earns interest. Talk to them about making regular deposits, so their savings will grow for something special they want in the future. Get them to talk about what they want to save for, and help them identify what those things cost. Older teens with jobs will have paychecks, and that also gives parents the opportunity to talk to them about withholding and taxes.
Talk to your children about the difference between needs (food, shelter, clothing) and wants (toys, jewelry, entertainment). Explain your family’s priorities for meeting the needs of your family before budgeting for the wants. If your teen’s school is offering the free NEFE High School Financial Planning Program (HSFPP) through social studies, consumer sciences, math, business, ROTC or free enterprise classes, encourage your teen to enroll. As a parent, you also have access to these free programs online.
Just as your children can imitate how you walk or talk, your children will also be watching you and learn about money from how you talk about your finances, buy groceries, pay bills, comparison shop, budget, save and spend. Will they see and hear you managing your money with confidence and saving for the future, or will they see you upset and hear you complaining because you are living paycheck to paycheck? It is better for your children to be confident and not feel stressed or afraid to deal with money. Even adults don’t like to deal with what they are afraid of or what stresses them. Good money management skills can be learned at any age, and the earlier your children are taught these skills, the more practice they will have and the more confidence and ability they can develop. Start early, teach your children about money, and see what you can learn in the process.
-- Information adapted from Federal Citizen Information Center, Consumer Focus: Talking to Your Kids About Money.