Turn your kids into back-to-school accountants
Back-to-school time is the perfect opportunity to teach kids about money.
Back to school happiness is just a spreadsheet away — as long as you put the young ones in charge of the numbers. Turning your kids into accountants for this annual rite serves up all kinds of parental benefits from reduced stress and fewer arguments to less money spent (believe it or not.)
And, of course, the advantages to children of all ages are enormous. Not only do they learn how to plan their spending but they develop tracking skills, accountability and, most importantly, are forced to make financial choices.
However, kids as back-to-school accountants only works with a bit of effort by Mom and Dad. There are just a couple of weeks left before the bell rings — enough time to get the mission underway.
A clothing allowance for all those back-to-school togs is a great financial teaching tool for all ages. The first step is ensuring they purchase essentials before the stuff they really, really want.
The second step is to encourage them to go brand-less for the things that aren't vitally important in order to leave enough left over for those ridiculously expensive True Religion jeans. Speaking of logo mania, if the brand is a budget-breaker try Winners, an outlet mall or consignment store. And let them search through the racks, they'll appreciate their deals much more than if Mom or Dad does all the work.
The third step is to keep the parental lips zipped. You may not like their purchases but as long as they are appropriate (bustiers just don't work for school) let them make their own choices and mistakes.
With a back-to-school allowance comes accountability. Don't just hand over the money and let them have at it. Here's where the spreadsheet comes in handy. After every shopping excursion have your kids enter the items and amounts. They can easily see how close they're getting to the limit. Also, until they actually wear something leave the labels on so returns are easy.
Actually, returns are an important financial lesson that teaches them not only to keep receipts but to pay attention to the time limit on taking purchases back. Returning things is an important consumer skill and it's worth pushing/encouraging them to do it.
Sale items, except in larger stores, are often not returnable or can only be exchanged, so drill that caution into them before they head out to the stores.
During the school year kids spend money on transportation, food and activities. Set up a weekly budget and give the sum to your child on Sunday. However, ensure they don't take the whole amount with them on Monday. Theft is very common in schools. In fact, the U.S. National Crime Prevention Council notes that school kids are far more likely to be victims of stolen property than their parents.
Any kind of theft can be traumatizing but losing an entire week's allowance is worse than having a single day's taken.
A spending report card is essential. Not only do children need to keep track of where their money goes but parents must also. It is very difficult to recreate the previous week's spending first thing Monday morning when Jack or Jill asks for the school money. Last week I mentioned a number of tracking apps for college students. They can work for younger kids too but in elementary and early middle school, students are less likely to have smartphones or tablets, so a small notebook works just as well, though isn't nearly as cool.
Make it a rule that before receiving the next week's school allowance, kids need to provide a spending report for the previous week.
Say no to more money if your children run through their weekly amounts and can't provide an accounting. Don't be swayed by, "What ... I'm supposed to starve\walk\miss out?"
Kids need financial boundaries and a back-to-school allowance — with them in charge — not only provides the needed structure but also carries over into every aspect of their spending in the future. Additionally, children who make their own back-to-school purchases tend to be more satisfied with them and take better care of what they bought.
Finally, I promised at the top that turning your kids into accountants would mean less money spent. By being organized you'll avoid expensive, last minute shopping nightmares. Tracking keeps kids and parents on top of what has been spent and research shows that the simple act of writing down purchases makes it easier to stick to a budget.
Kids can be great stewards of money, if you give them the chance and the tools.
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