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How to Use Back to School Shopping as a Lesson in Financial Literacy for Your Kids

by Julie Jaggernath

Teaching financial literacy to your kids can be hard when they have few or no financial responsibilities of their own. But like us, children learn best by doing – especially when doing something they care about. Chances are your kids care a lot about what they’ll bring with them when they go back to school. But as excited as the kids are, it’s easy for parents to feel overwhelmed by the advertising and hype with back-to-school sales starting as early as July in some stores. For retailers, this shopping season has become a close second to Christmas. It’s also a golden opportunity to teach financial literacy lessons to your children. Here’s how to do that for younger as well as older kids. 

Explore this Teen Budgeting Series:

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  3. Use Back to School Shopping as a Financial Literacy Lesson - You Are Here
  4. How Kids Can Spend Gift Money Wisely
  5. What to Do If Your Teen Wants a Cell Phone
  6. What Teens Should Know Before Buying Their First Car

Financial Education for Younger Kids: Let Them Make Some Back-to-School Shopping Decisions

Helping kids, children, and teenagers learn how to be smart with money and learn money management skills.Kids start getting a financial education as soon as they see you using money. To help shape their experiences, involve them in decisions that matter to them – and back to school shopping is a big one. Letting them participate in shopping for things they need, like school supplies, is a great way to help them gain skills as you involve them in the decision-making process. Starting off, it can be as simple as allowing them to help choose their pencil case and backpack. If there’s a particular backpack they want that’s a bit more expensive, then instead of just buying them the more expensive option, consider having them save up their allowance for a few weeks before buying it. Even if it isn’t really their money being used, this still works as a great financial literacy lesson on saving and delayed gratification.

When they’re a bit older, go over the back-to-school supplies they need with them and help them to compare prices and the quality for the products they need or want. Once they can add and subtract easily, give them a set amount of money and help them as they choose what they can afford within that limit. As much as possible, try to let them make the shopping decisions and ask them to explain their reasoning before making a purchase. If the decision they’re making isn’t in line with your household’s expectations or budget, explain your reasons for correcting their decision. They need an opportunity to connect the dots in their mind as they work towards having knowledge around financial management.

Help Older Kids Develop Financial Literacy Skills by Letting Them Take Charge of Back-to-School Spending

Once your kids are teens, they’re better able to handle more financial responsibility with shopping. Provide a limit as to how much you can afford for their back-to-school needs and wants, and then support them as they shop within their allotted budget. If appropriate, encourage them to look for ways to earn extra cash, whether that’s by doing more chores, helping with the family business, or taking a suitable part-time job. As long as their main focus is still school, working to earn some money of their own can help them appreciate its value and motivate them to use it more effectively.

kids need to practice making spending choices and using moneyLearning how to balance priorities and make reasonable spending choices takes time and practice. Teens are also one of the most targeted demographics by the sophisticated marketing tactics of consumer brands. Advertisements and peer pressure can push them towards high expectations of what they “should” buy. Yet as long as what they want isn’t too much of a problem, consider letting them learn a few lessons from the school of hard knocks. For example, if they use up all their savings on back-to-school deals and then don’t have enough for the Christmas shopping they want, resist the urge to bail them out. Understanding the consequences of overspending now will be invaluable for them when they’re out on their own. Learning financial literacy in your teens can make the difference between a future of stability and one struggling with debt.

It’s Never Too Early to Help Your Kids Learn Financial Literacy

Providing hands-on financial education for kids is an important step to their future success. There’s something exciting about starting a new school year each September, but you know this shouldn’t mean a shopping spree that breaks the bank. Take the opportunity to help your kids know this as well. Just like learning to read, kids need to practice making spending choices and using money so that they get good at it. This year, start school early with some financial lessons and shop for back to school together.

Up Next: How Kids Can Spend Gift Money Wisely