There's never a bad time to teach children financial responsibility, but it may be difficult to find unique ways to help them relate it to the real world. As inflation and high gas prices continue to wreak havoc on the average American’s budget, now is the perfect time to start teaching your kids how to handle necessary expenses during times of economic difficulty.
Did you know that the average American now spends $500 - $800 on average for back-to-school supplies, with 2/3 spent on clothing and electronics? In some states, this amount can even go over $1,000!
Don’t worry, you don’t have to spend the national average just to send your child to school. Follow these steps as you prepare for the upcoming school year. Not only will you be saving money, but you’ll be teaching your children healthy financial habits as well.
Make a list and separate it into needs and wants.Most schools provide a list of school supplies, and there are likely some items your child would want that aren't on the list. Make a full list so you know exactly what you need to buy and make sure all items are listed by priority.
Discuss the list.This is a key step in the financial lesson. By going over the list with your kids, you can discuss how to handle the wants, whether that’s by saving money to purchase later on in the school year, taking them off the list altogether, or making a plan to save more money for next year to be able to get more of what they want. This will prepare your child to make tough decisions about prioritizing what to buy and what not to buy when it's time to go shopping.
Look for items you already have.Go through the list of needs and cross off items that you already have. For example, if you have a healthy supply of pens and pencils in your home, there's no need to buy more.
Don’t forget the power of community, either. Reach out to other parents at your school or the parents of recent graduates and ask them if they have any extra school supplies they would be willing to give to you or swap for something you have a lot of.
4. Research the items on the list.
Look at the list of needs and do some Google searches to get an idea of how much each item will cost. This will help you set a realistic budget.
You can also check Amazon for package deals and quick price comparisons to see if it will be cheaper to buy online. That way you can save time and gas money getting everything you need.
Some schools may offer supply package deals where they buy supply kits or school uniforms in bulk and are often able to offer you a better deal than in stores. It never hurts to ask the school about the assistance they can offer you to ease costs.
5. Research/Limit Extracurricular Activities.
I know what you’re thinking. How could you possibly choose to limit opportunities for your kids? It’s understandable to want to give your kids all the things you never had, but you also have to be realistic and set some boundaries when it comes to spendy activities. Extracurricular activities can get out of control fast, especially if you have more than one child. This puts a strain on your time, budget, and family time as you try to juggle everything at once. There’s nothing wrong with having multiple hobbies, but some come with heftier price tags and time commitments than others. If your kids want to participate in extracurriculars, encourage them to narrow down their interests to one or two options. You can follow these steps to get started:
- Research all available extracurricular activities. Be transparent with your kids about the costs of each club, sport, or activity, as well as what will be expected of them (how many games/events/meetings per week, cost of photos, jerseys, equipment, etc.).
- Once your child has picked their extracurriculars and understands what is expected of them, set up a chore chart and assign a number to each. For example, if your child loads and unloads the dishwasher, they will receive $2. If they mow the lawn, they will get $5 (and so on, etc.). You can set up chores based on age and abilities and work from there to help your kids understand the financial responsibility of saving for what they want. You can also choose to match whatever they earn to help them reach their goal faster. If your children are old enough to get a job outside the home, encourage them to research part-time job options. This will give them an opportunity to experience the real world and earn some extra cash.
- If an activity is too expensive, let your child know about alternative options that still allow them to participate in what they love with less cost involved. For example, maybe the traveling soccer team is too expensive with the costs of jerseys, sports equipment, and traveling to other towns. However, there may also be a local rec soccer league that has games once a week during prime soccer season. Picking the rec soccer league still allows your child to play the sport, without all the additional costs.
6. Set an amount for your budget.
Take the information gathered in Steps 4 and 5 to set a budget. You should have a good idea of what it will cost for the items on the needs list. It's important, however, to set the budget a little higher to compensate if items at the store end up costing more than you expected, and also to leave room to pick up an item or two on the wants list.
7. Go shopping.
Try out a couple of different stores - including dollar stores and thrift shops - to get the best value for your money. Fulfill the needs list first, then reward the child by using the leftover amount from the budget to purchase items from the wants list.
Before you go on your shopping spree, make sure you follow the stores you love on social media to see when they have sales going on. A lot of clothing stores will try to promote the back-to-school deals before school starts but have the best prices in September or October. Don’t be afraid to wait a few months to buy some of the essentials for your kids, especially if their current clothes still fit, are without rips or holes, and are clean. Make sure you also mark down any sales tax holidays on your calendar so you don’t miss any great deals.
Remember, while dollar and thrift stores are great for basic items, sometimes it is better to go to a bigger chain store, especially for electronics, so you know that you’re getting a reliable item. Check with your credit card provider as well to see what kind of deals they may offer on back-to-school shopping. Some companies offer cash back or other perks as you buy.
8. Save for Next Year.
Remember, it’s never too early to start saving for the future. Make a plan this year to set aside money before next school year so you have less stress. Your local Availa banker is waiting to help you set up a savings account for all your needs, so call or stop by today to get started!