The music CD or the new backpack?
Parents can teach their children to make good financial decisions as they shop for back-to-school clothes and supplies by allowing them to make mistakes, says David Dieterle, president of the Michigan Council on Economic Education. He suggests parents give their teenagers advice and talk to their children about their back-to-school budget. Then have them list their needs and wants and give them financial goals to set. Prioritize the items on the list, and see what fits into the budget.
“Parents can make sure children understand that when they make a financial decision, there is a consequence,” Dieterle says. Children who are old enough to earn money through jobs after school—whether for mowing the lawn or feeding the pet goldfish—should be allowed to decide how to spend it, he says, “as long as there is no impact on their health or safety.” A teen may decide to buy that CD instead of the new backpack. But that teen may end up lugging books back and forth to school in a grocery store bag within a couple of months. Lesson learned.
Smart Goal Setting
What's next?
- Give tips on comparison shopping and alternatives to shopping at the local mall. Are there any consignment stores in your area? Do they get a lot of traffic from back-to-school shoppers?
- Many banks and credit unions offer savings accounts for youngsters with low initial deposit requirements. Talk to bank officers about ways parents can teach their children about saving.
- Religious leaders may give advice on teaching children to use some of their money to help others through a charity or place of worship.