Back to School Provides Learning Opportunity on Budgeting

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DALY CITY, CA - AUGUST 13:  School teacher Liza Gleason shops for back to school supplies at a Target store August 13, 2008 in Daly City, California. With stores gearing up for back to school shopping, the Commerce Department reported today that retail sales fell 0.1 percent in July, the first time in five months.  (Photo by Justin Sullivan/Getty Images)

"Back to School" is not quite a national holiday, but you might not know that from the way advertisers have grabbed onto the season to lead them out of the retail doldrums.  Every August and September, retailers and apparel makers run ads touting the must-haves for back to school.  No student (or their parents) is immune. 

Kindergarten kids need the newest backpacks imprinted with their favorite cartoons. Middle-schoolers want the hip hoodies, jeggings, and even the right kind of folders. High-school students are bombarded with commercials of new phones or trendy footwear.  And of course, the entering college freshman represents a potential bonanza to stores: he or she needs anything from a laptop, to new sheets, to desk chair, and other furnishings for a new dorm room.

Despite (or because of?) this consumerist tide, Back to School is a great opportunity to teach your children, no matter how young, the ins and outs of setting up and following a budget.  There is no better way to teach your kids money than through real life experience, so take advantage of the season.

When I was young, my parents always gave me a certain amount of money and I was free to use it (within reason, of course).  With this allowance, I had to get everything I needed for school.  This taught me to manage my expectations with limited resources. Once in middle school, I spent $20 on a cheap pleather jacket from one of those trendy stores that cater to tweens. That $20 represented 30% of my entire Back to School budget. After I realized that the jacket was ill-flattering, uncomfortable, and hot, I knew I had to make more informed choices next year. I considered that $20 my tuition to the school of What Not to Wear. The following year, you can bet that I was much more careful what I purchased and where I went. Bye bye trendy stores, hello Target.

Let's say you plan on spending $200 in back-to-school clothes shopping for a teenage girl. You can give that amount to your daughter with the explicit instruction that once the money is gone, that's it.  The key to this exercise: if Jane blows the entire amount on two pairs of pants and a vest when she needs a new winter jacket, you cannot step in and provide the money. That will defeat the purpose of this exercise.  Instead, you can offer her a new chance to work to make the money for the jacket, or, you can buy the few must-have pieces for her and then give her the reminder to budget as she sees fit.

If you have a college student who needs money to furnish his dorm and buy a new laptop, you can give him the money and help him draw up a budget to plan X amount for the laptop and Y amount for a new bean chair. If the college student wants a better laptop, he will have to settle for sitting on the floor. Or, if he splurges for a futon for himself and his friends, he might have to give up that Mac Book Pro and get a cheaper model instead.

How much money do you spend on Back to School? Did you try to make it a money exercise?

Savvy Living Through Personal Finance -- @WellHeeledBlog


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