shopping represents one of the best opportunities all
year for students to learn a few lessons before they
return to the classroom — money lessons, that is.
they reach their high school years, kids have to be
prepared to do some comparison shopping and live within
a budget, because they’re going off on their own in
three to five years and they need to be prepared,"
said Steve Economides, who with wife Annette heads
America’s cheapest family, runs moneysmartfamily.com
and has written books including "The MoneySmart
not raising kids; we’re raising future adults."
will spend $68 billion during this year’s
back-to-school season, including back-to-college,
according to the National Retail Federation. That’s an
average of $630 per family for school-age kids and $899
for families with college-bound students.
the back-to-school drill can be stressful for parents,
including some money lessons is worthwhile, experts
don’t want to overwhelm your kid, so you have to be
sensitive to who your kid is and what they’re going to
be taking on," said Annette Economides. "But
if they can handle learning a new system, and you can
handle implementing it, it’s a great time."
of the reason it works is because kids care about school
shopping, said Patricia A. Seaman, a spokeswoman for the
National Endowment for Financial Education.
shopping, like all shopping, is a teachable moment for
kids and money, and they have a vested interest in the
outcomes since they are the ones who have to carry the
backpacks and wear the clothes they have chosen for the
upcoming year," she said.
turns out kids really need those lessons. Despite a
high-profile focus on financial literacy in the U.S.,
teens generally are not excelling when it comes to money
international report released last year showed about 18
percent of U.S. 15-year-olds didn’t reach a baseline
level of proficiency in financial literacy, according to
an assessment by the Organization for Economic
Cooperation and Development. U.S. teens ranked below
average and well behind those from China, Belgium and
are some ideas for schooling your kids about money
A spending plan is fundamental for using money wisely,
so the process doesn’t start with a trip to the mall
but with a conversation. Take inventory of what they
need, typically school supplies and clothing.
with your child to make a list of everything he or she
wants and needs for school and how much it costs,"
Seaman said. But mom and dad should have veto power over
vs. wants. The difference between needs and wants may be
the most important lesson of all for kids.
need a backpack; you want one with the Avengers on
it," Seaman said. "Challenge your children
when they say ‘I want.’ Have them find the basic
version of what they want and discuss how it will
fulfill their needs."
time to talk about how wanting things is natural, but
that some people define themselves by what they buy —
and how keeping up with the Joneses is a race they
upgrades beyond the functional choices and their
budgeted amounts, require the child to contribute their
own money. On average, teens this year will contribute
$33.27, and preteens will spend $17.57, according to the
End rule. Clothing is a necessity, but high-end sweaters
are not. Where do you draw the line?
answer is the Lands’ End rule, suggested by Ron Lieber
in his book, "The Opposite of Spoiled: Raising Kids
who are Grounded, Generous and Smart About Money."
argues that Lands’ End is known for quality apparel
but not pricey high fashion. If a child wants a pair of
expensive jeans, parents might pay whatever Lands’ End
charges, and the child must pay the difference. The
benchmark retailer is up to parents; they can instead
choose to draw the line at prices from Target or
shopping. Looking up prices online before heading to the
mall will give you and your child an idea of the price
range for that item. Incorporating secondhand stores
into the shopping process is a great lesson too —
especially for clothes or sporting equipment. It makes
you think about the extreme markup for new items.
Shopping on a budget allows older children to experience
the concept of opportunity costs, or trade-offs — how
buying one item limits their ability to buy others. It’s
the "money doesn’t grow on trees" lesson.
scenarios in which children must choose between
competing spending priorities. "Do you want the
$100 sneakers or a moderately priced pair and an extra
pair of jeans?"
value. "The cheapest isn’t always the best buy,
and price isn’t always the best indicator of
quality," Seaman said. Examine merchandise with
your child and talk about how well it’s made and how
long it’s likely to last.
clothing, introduce the concept of "cost per
wear." By that measure, a $100 pair of jeans worn
40 times during the school year is far cheaper than a
$40 pair worn three times.
lessons. With a younger child, you might teach a money
lesson on a single back-to-school purchase, like shoes,
instead of the whole shopping event, Steve Economides
said. Set a budget and help them do the comparison
"Don’t bail out your kids if they overspend;
instead, take them back to the store to return the items
that blew the budget," Seaman said. You could even
introduce the concept of credit, borrowing money from
you but paying it back with interest: "You can have
this fancy binder, but it will cost you $7 instead of $5
when you pay me back," she said.
about how to resist impulse buys, delay gratification
and not succumb to marketing messages.
ahead. Beyond needs for the first day of school are
expenses while school is in session. Forecast what
expenses are likely to crop up during the school year,
like new cleats for baseball or soccer, spending money
for a school trip or cash for prom.
it. It’s also a good time to talk about the other side
of the money ledger, the earning side. That could mean
doing extra household chores for pay or, for older
teens, getting a job.
senior year expenses are a killer," Annette
Economides said. "In junior year, they should
surely have a job by then because in their senior year
they have yearbook, class rings, senior pictures, prom.
And they really should have some skin in the game for
most of that, if not all of it."
cash. Studies show that using credit or debit cards
leads consumers to overspend because it takes away some
of the psychological pain of handing over hard currency.
Back-to-school shopping with cash might be more of a
hassle, but it might also make an impression as children
see the bills going from wallet to cashier.
for older children doing their own school shopping, give
them cash and tell them as long as they get everything
on their list, they can keep whatever is left.
you’ll see some smart spending.