Lauren and Taylor are seasoned vets of managing their back-to-school budgets, and the conversations we have while the girls figure out their game plan are fantastic. Even though the stores are crowded and chaotic, please take advantage of these teachable money moments while you’re stocking up on notebooks and new clothes.
Whether your kids are young or old, these are timeless lessons that every child needs to to learn. And don’t forget to repeat them frequently to help them take hold.
Kids don’t innately understand why budgets matter or why spending more than you have budgeted for should be avoided. And it is this mindset that carries forward into adulthood and causes so many problems later.
Whether or not you have your kids manage their back-to-school budget (which I strongly recommend you do), they need to be aware there is a budget. Don’t hide the number but share it with them, and as you shop, keep a running tally out loud.
When you hit the limit, tell them and stop shopping. Explain why you cannot run to the ATM and get more money, which they will most likely suggest you do. Money is finite. We all earn so much per year. Based upon your bills, goals and other priorities, you determined how much you could comfortably spend on back-to-school supplies without creating debt. If you go over that amount, you have to take money from another area, such as your vacation, entertainment or dining out fund. There are consequences to spending more money than planned. Money does not magically replenish itself.
Now that your children understand why we budget and avoid spending more than intended, it’s time to get those creative juices flowing. Review the items in your cart again and determine what items are wants and needs. Separate the needs and take a closer look at the wants.
Are there things you want more or is there a cheaper option available? Your kids many initially balk at the idea of swapping out their name-brand school supplies for generic or store-brands. Now show them how much money you could add back to the budget if you went with cheaper options. They may suddenly decide that store-brand school supplies will more than suffice. They are learning the art of compromise.
Two years ago, Lauren budgeted for a pair of shoes that all her friends had. The problem was Lauren didn’t actually like the shoes. She just wanted to fit in with her friends, which is common and understandable. We all want to fit in.
The following year, the shoes went into our donation box after only being worn a few times. While I don’t like to waste money, this “mistake” gave us a few great teachable moments.
Today, more than ever, there is intense pressure to keep up. People constantly compare themselves and don’t want to be left behind. Kids are no different and are probably more susceptible to peer pressure. So Lauren and I had a good conversation around the items she wasn’t able to buy that she really liked because she spent money on something that she never really wanted. Playing keep up also has a price.
We then talked about how none of her friends stopped liking her because she never wore the shoes they had. They didn’t even notice. Your real friends like you for who you are; they don’t care whether or not you wear the same shoes as them.
At the same time, there is nothing wrong if your kids want a specific pair of shoes or jeans. This is normal. What you want to stress is that they should want those items for THEMSELVES, not to impress others or make their friends happy. If their desired items doesn’t fit your budget, then help them find ways to earn the money to buy it themselves. If it really means that much to them, they will be willing to earn the money for it.
Reality Check: It’s true real friends don’t care about the things we wear or have. But let’s not kid ourselves either: sometimes it does matter. Being a kid, especially the older they get, the tougher it can be. Kids can be ostracized for not having the “right” clothes, etc. Again, I don’t suggest you create debt to buy the “in” things for them, but don’t dismiss the importance either. If your child expresses concern over this, talk it through. You may discover:
Listen to your children and read between the lines. Get them to open up to you and you may discover it has nothing to do with clothes or having the latest gadgets. They may need your support, guidance and potentially your intervention.
If the above is not an issue, then revert back to having them earn the money for those items if they don’t fit your budget.
I can’t pretend that I love the craziness of back-to-school shopping, but I do love having these conversations with the girls. Every year they impress me with how much they understand and the smart choices they make with their money. The occasional mistake still happens, but every time they make one, they also learn a valuable lesson, which is just one of the many reasons why we do this every year.
For more help and tips, see my series on Back-to-School Shopping:
Shannon
The Heavy Purse Store is now open! My new downloadable Money Club Workbooks are now on sale. Each workbook provides five targeted lessons to help you raise Financially Confident Kids. Please check them out in The Heavy Purse Store.
SHANNON RYAN, CFP®
I remember having discussions with the kids about the back to school budget. Marisa was always the one who just had to have the latest and trendiest stuff. I think she understood what was going on but she was testing the waters :).
Thank goodness all she needs now is a binder with dividers and composition notebooks. Definitely a huge savings now :).
Great advice as usual lady! Have a great new week!
Lydia asked me if we could go on vacation again soon the other day (she doesn't know about the cruise- it's a surprise.) I said I wasn't sure. She said, "Well, do we have enough money?"
I said, "yes, BUT we need to pay for other things too though, so we'll see."
I love that she understands that things cost money and that everything isn't free!
Jay