Guest column by David Flores, GreenPath manager and counselor
As many families undertake back-to-school shopping in the coming weeks, GreenPath Debt Solutions reminds parents that it is the opportune time to share some personal finance lessons with their kids.
The nationwide, non-profit financial counseling and education organization says that simple bits of advice can help kids gain a better understanding of money and budgeting, which can help them throughout the school year.
When it comes to school supplies and clothes, it can be an expensive couple of weeks: According to the National Retail Federation, a family with children in grades K-12 will spend an average of $634 this year for back to school needs.
“Growing up, many kids think that money comes from the ATM. 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.”
Here are some suggestions from GreenPath:
1. 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.).
2. 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.
3. 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.
4. 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.
GreenPath has set up a teen budget sheet to help teens build a budget and track weekly spending at: http://www.greenpath.org/uploadedFiles/GreenPath_University/News_you_can_use/TeenBudget.pdf
5. 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.