Even though experts are saying the recession is over, there is no denying that consumers have become more frugal. As the back to school shopping season begins – occurring earlier than in past years – the notion of staying focused on a budget must apply. While families spend on what they need, parents must also work with their children to determine what they really don't need.
To help families navigate through back to school shopping, Visa offers parents and students free access to an award-winning money management program called Practical Money Skills for Life (www.practicalmoneyskills.com). The program comes complete with an array of interactive resources, games and calculators, including a "Back to School Budget Calculator" which gives students hands on experience when it comes to preparing and sticking to a budget. The site also features an allowance calculator designed to help parents get a better grip on their kids' spending habits.
Available to discuss tips on how parents can use back to school shopping as an opportunity to lay the foundation for helping their children develop sound money management habits early in life is personal finance expert and the Senior Director of Visa's Global Financial Education Programs, Jason Alderman. Some tips include:
- Set a realistic back to school budget before you go shopping.
- Have your kids prepare a budget with you.
- Take a print out of your estimated budget with you when shopping and have your child enter in all of the actual expenses.
- Encourage children to follow the budget. Stress that getting a more expensive item might mean sacrificing something else.
- Encourage kids to consider ways to cut costs and manage cash flow, like clipping coupons, looking for sales, or buying supplies each semester.
- Teach your kids to comparison shop to avoid impulse buying or paying for overpriced items.
- Differentiate between "needs" and "wants." Encourage children to contribute their own money to fill the gap between what they "need" and what they "want."
- Tell kids that if they come in under budget, you will split the savings with them.
- Continue the budgeting lesson by starting kids with an ongoing monthly budget.