Back to school a chance to teach kids about money
Getting the kids ready for the school year may be a busy and expensive time for parents, but it can be a good opportunity to lead by example and teach your children a thing or two about budgeting and money management.
Lower gas prices, a stable but lower Canadian dollar, and enhanced Canada Child Benefits are expected to drive Canadian parents to spend more this year on getting little Johnny or Jane ready for the coming school year. The average cost of outfitting children for school year this year is expected to jump by 4.5 per cent over 2015, according to a recent report from EY.
A study by Consolidated Credit Canada has found that Canadians spent close to $3 billion on back to school shopping in 2012. The study found that parents are finding savvy ways to save on the rising costs of back-to-school shopping such as taking advantage of special offers, re-using school supplies from the previous year where possible, using coupons to increase savings, shopping at discount stores, giving children hand-me-down clothing and supplies, buying fewer brand name items and shopping earlier in August.
High technology means high costs. Cell phones, laptops, tablets and desk top computers are expensive. If your children need them, do a lot of comparative, look for deals, specials and non-brand names and avoid expensive contracts.
You can start the back-to-school process and get the most of your budget by first taking stock of what equipment and supplies you have on hand, what will suffice for your child’s needs for the years, and determine what you really “need” to buy versus what your kids would “like” to have. Differentiating between needs and wants is one of the most crucial elements in budget planning and money management.
Contact your child’s school or teacher to find out what supplies they will need, if the school has a dress code, whether any specific things are needed for special events or activities and any other extraordinary expenses, and factor these into your budget.
Sit down with your child and create a list of supplies and clothing that are needed. This is an opportunity to help them understand the difference between needs and wants and is a good, fundamental lesson that will serve them well in their management of money in the future.
Agree on the list of items needed, shop with the list that you have agreed upon, set a spending limit and stick to it. Studies have shown that people who shop without a list spend more than those who have one. If you have a list and your child knows you’re going to stick to it they will be less likely to start asking for everything they see and it will be easier for you to say no.
If there are supplies or items that are not needed now but will be needed in the future, buy only what you can afford first and explain that the rest will have to wait until you have the budget to pay for it. Waiting develops patience and sends a message to your child that it’s wise to buy what you need when you need it and not to go into debt to buy something you’d like in the future.
If you have more than one child, you may want to set a total budget and then explain that it has to be spread out between all of the children and can only be for things that are essential.
Back-to-school may be a hectic time but it’s a great opportunity to teach your children the value of having a budget, determining what they really need versus want, the value of comparative shopping, looking for deals, and the need to share.
Edited on 25 October 2017