August can be a frantic time for parents – trying to organize the last few weeks of summer vacation, getting your kids to complete summer assignments and the dreaded back to school shopping.
I hate shopping but find that it is a great time to teach my son a practical financial lesson. There are lots of studies showing that most college graduates have no idea how to handle money and there are few financial education courses offered in school, so it is left up to parents. I witnessed the problems that students get themselves into first hand with my own step daughters, so my husband and I decided that we needed to do a better job with our son.
My husband and I realized early on that we needed to involve our son in picking out his clothes for school. Because he would not wear clothes he did not like, we instituted a plan that not only involved him in choosing his clothing but also teach him how to work within a budget. Together we determine his needs, decide on a budget and determine where to shop by looking at store circulars and online. With list in hand, we go shopping. Our son selects what he wants, takes it to the counter and pays for it. Over the years he has matured prioritizing the list and keeping track of what he has spent because when the money runs out, we are done.
We also thought it was important for him to understand the difference between “want” and “need” so we threw in a caveat - any money left over is his to spend as he wants, but he must get everything on the list. Trust me, he has become a savvy shopper! He is not paying for designer jeans unless he finds them in a discount store and when it comes to school supplies they are the basics. He decides if he is going to spend money for the designer labels or if he is going to have money left over for a movie or video game. We offer our opinions but ultimately he decides how to spend the money.
Our son is learning lessons he will use throughout his lifetime: creating and prioritizing a list of necessary items, creating a budget, smart shopping and using cash not credit. Parents have many responsibilities and making sure our kids are financially savvy is vital for their independence and the welfare of our country too.
See you out there – I’ll be the parent holding the bags while her kid is shopping.