Add “learning financial literacy” to your child’s back-to-school to-do list.
With only a few weeks left of summer, parents around the country are heading to stores to pick up items on their child’s school shopping list.
Families with children in elementary school through high school plan to spend an average of $696.70 on these items, topping the previous record of $688.62 set in 2012, according to the National Retail Federation.
Back-to-school shopping doesn’t just have to be a chore — it can also be an opportunity to teach your child how to budget and spend responsibly.
“It is a great chance to look at what happens when you enter the world of retail and see how you should strategize to make your money effective,” said certified public accountant Neal Stern, president of Flemington, New Jersey-based Greenmeadow Associates and a member of the American Institute of CPAs’ National CPA Financial Literacy Commission.
Here some money tips you can teach your children through back-to-school shopping.
Make a plan
Most children will get a list of supplies they should purchase from their school.
Review the prices of these items online with your child to determine an appropriate budget before you walk into the store, said Mitch Goldberg, president of investment firm ClientFirst Strategy in Melville, New York.
This is also a good opportunity to explain sales taxes to them, and account for it in your budget, he said.
“That’s basically what pays for the police and fire department and road repairs,” Goldberg said he tells his children.
Looking at prices online ahead of time can also help you teach your child about price matching, said Stern.
Stores will sometimes offer lower prices on line in order to compete with retail giants like Amazon, he said. Don’t be afraid to ask merchants to match the cost.
Goldberg also suggests setting a limit on the amount of time you and your child are going to spend in the store.
“The increased time in a store means increased opportunity for impulsive purchases,” Goldberg said.
Avoid impulse buys
Stores create displays with knickknacks that children will ask to throw in the cart, Stern said.
Saying “no” could this turn into a teachable moment about buying items you want on impulse but don’t actually need.
Ask your child, “Would you have made a trip to the store to buy this?” Stern said.
If your child is old enough to have a job, ask, “Is this worth two or more hours of work?” he said.
If the answer is “no,” you can tell them, it’s an impulse buy.
Goldberg said you can also teach your child to fight the urge to buy things they don’t need by telling them that if they still feel like they need it in two or three days, they can purchase it online or return to the store.
“Usually what happens is when some time goes by, they either forget about it or something new comes into the picture,” Goldberg said.
Focus on functionality
Children might be tempted to buy a backpack or notebook with their favorite television character or sports figure on it — but it will probably be more expensive than a generic brand that’s just as functional.
“Tell them ‘if we use our money effectively, we can actually get two of the items that we need for the same money that this one costs us,’” Stern said.
He added that it could help to explain that sticking to their budget when it comes to essential items might allow for them to buy some items they want, but don’t necessarily need, at the end of the shopping trip.
This can especially come up when children want items like backpacks with this year’s popular characters on it, even though they already have one in good condition.
“Talk to your child about whether it’s the best use of your money, or if it’s smarter to use that money on something you don’t already have,” Stern said.
Reflect on your purchases
After back-to-school shopping, your child might be disappointed that you decided to leave some items on the shelf.
Stern advised reminding them about the things you did buy and that together you made good, strategic decisions.
He suggests you point out that there will be many times when they face similar situations, and how it will be important for them to remember the money lessons they learned while shopping with you.
“It’s always good to reinforce what has been learned,” Stern said.