Shopping for back-to-school items for your elementary school children, but afraid of a fight in the jeans aisle?
Parents who hope to keep a lid on spending can soften the edge by planning the back-to-school budget with kids, shopping together and teaching them how to separate needs from wants — and how to tell what's a good deal.
"You need to involve them in the process so they understand the value of money," says Lori Mackey, president of Prosperity4Kids Inc. in Agoura Hills, Calif., which offers material to teach kids about finance. "These are life lessons that children will need."
Here are five personal finance lessons that back-to-school shopping can teach:
1. Spend within your budget
Parents should start by working with kids to set a limit on how much to spend on clothing and supplies. Jacob Gold, a certified financial planner in Scottsdale, Ariz., recommends using a debit card or cash so kids see how quickly the money disappears.
"They have to learn to live within the certain threshold," said Gold.
2. Know what you have
Go through your child's closet to find out what fits and what doesn't — and what needs to be repaired or handed down. Maybe that jacket just needs to be patched or the shoes just need resoling. Consider recycling last year's backpack if it's still in good shape.
3. Separate wants from needs
Children may want five pairs of super-skinny jeans in different colors, but parents should get children to ask themselves each time they want to buy something: Do I really need that? Start by coming up with a list — before heading to the mall — of what's necessary in the way of school supplies, shoes and clothes. Phil Heckman, director of youth services at the Credit Union National Association, suggests letting children buy something extra with money left over after they buy those necessities.
4. Get the most bang for each buck
Talk about seeking discounts and using coupons, and show teens and preteens how to compare prices online at sites like pricegrabber.com and dealtime.com.
But also remember that a 20-cent notebook may seem like a great deal — but won't be if it falls apart in a day or it's not the size your child's teacher requires. Examine products carefully with your kids to determine the quality and consider spending a bit more on a pair of jeans that won't fade after washing a couple of times or a binder with strong enough rings to withstand nine months of jostling in a backpack all day, for example.
Children often want instant gratification, but parents can teach the importance of buying a little at a time. They may even be happy about waiting until after school starts to buy some accessories so they're sure what's hip and what they need. This can help defuse some kids' sense they're entitled to new shoes just because it's fall, Gold says.
"By explaining that a dollar is difficult to earn, you can take children from the mentality of entitlement to the savers' mentality," he says.
5. Be charitable
If you're getting rid of clothes your kids grew out of, donate them to a local nonprofit so your kids learn about being charitable — and how to get tax deductions. Bring your child along to drop off the clothes and talk about the people who will receive what you give. With older children, explain how to determine the fair market value for their items by checking websites like Salvationarmy.com.
"Children are naturally born givers," said Mackey. "So if you can incorporate that into back-to-school, it will encourage that in later in life. It takes the emphasis off of them and puts it on another person who is really in need."