Parents have the challenging job of preparing their kids for the real world. Social skills, manners, and doing well in school are all essential areas to focus on; however, parents can’t forget about financial management education.
An excellent way to incorporate money management into your child’s busy schedule is during back-to-school shopping. Parents can choose to make the topics of budgeting and saving a fun, realistic lesson by following the steps DiversyFund reviews below:
Start the journey by distinguishing needs from wants
Back-to-school shopping can be a stressful time. With 54 million students starting school, costs, crowds, and limited supplies can strike an unpleasant chord. Deloitte’s 2018 Back to School Survey shows that 29 million families spend over $27.6 billion on school supplies. That amount averages to $510 spent on each student.
Parents can consider using this time to not only teach their child how to start determining needs from wants but also how to save money for themselves in the process.
Take out your child’s school supplies list, sit down with them, and review it. Go through and have your child figure out what things were purchased for school the previous year and can be reused. After maximizing reusable options, your child has an idea of what he or she needs to purchase.
Compare costs before going to the store
An additional opportunity to teach your child about individual costs and demonstrate how quickly items can add up to large sum is by comparing online prices to in-store prices.
Explore an online vendor such as Amazon, and give your child the chance to search, find, and fill the virtual cart with the supplies he or she needs. This process provides a visual example for your child to see differences in cost when viewing individual items and when viewing a total purchase.
The lesson can continue by choosing not to complete the online purchases, but rather print out the filled cart displaying individual and total costs. Your child can then compare prices from online to in-store expenses and determine what supplies they want to buy from which vendor based on cost savings.
Play a budget game while shopping
DiversyFund encourages playing educational games to catch the attention of your children and keep them engaged. Think about giving them a budget and challenge them to find all their needed supplies with the money you give them. Tell them for every dollar they don’t spend, you will give them another dollar and all the money will be put into a savings account/piggy bank. Allow them to make the choice of spending it all now or saving up for a bigger item down the road.
This game helps children pay less attention to higher-priced name brands and focus more on cost. Distributing cash to your kids and encouraging them to go through the check-out on their own is a smart way to consider teaching money value. They also have the opportunity to see a realistic visual of how fast money can disappear from a wallet. By adding the incentive of matching every dollar they save, they will learn the value of saving, budgeting and planning ahead.