I had the opportunity this summer to teach young people the basics of financial management, and it was very interesting.
When one youngster was asked what he would do with the money he was given, he replied by “investing it” while the next one wanted to “buy snacks”. .
If you have young people, I encourage you to think about having this discussion with them.
On another note, we know the prices of everything are going up and supply is limited. Before we know it school will be back and before it puts more strain on the budget I encourage this time to be a time of learning about money and how we use it
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List of tips to help children know the price of their needs and wants
Here are some tips you could use before you hit the store to help kids understand the wants, needs, and choices we make.
- Look at your budget and decide what you can reasonably afford. Avoid using credit cards unless payment can be made at the end of the month to pay the full amount, otherwise interest accumulates quickly. If you want to use a back to school calculator, visit http://www.practicalmoneyskills.com/resources/financial_calculators/education_college/back_to_school
- Divide the amount of money between your children, according to age and class requirements list; it may not be an equal amount. Then help them make their shopping list.
- Talk about wants and needs. For example, I need a backpack, but maybe I want one with my favorite character on it. What am I going to give up or trade for what I want? It works best when we as parents don’t save them from bad choices, we can remind them, but letting them experience the consequences of their choices is a great life lesson.
- Prioritize the list so they buy the items they need first and then can save up for the extra things they want. Help them come up with a plan on how they can earn extra money to get the things they want. Realize that this is an important life lesson; we all have to compromise and work for the things we want.
- Use sale ads to get the most bang for their buck. See if store prices match or if there are coupons available. Add up the totals at different stores to see where is the best place to shop and if it really pays to go to multiple stores? How much will you save?
- As for clothes, do the same. Here is the budget, what do you need? What’s in your wardrobe that you can wear from last year? What can be added to make new outfits? What can we wait to buy until next month? Are there garage sales or exchanges with other families to make “new” outfits to start the school year?
- Practicing assessing where we are now, listing our wants and needs, and then planning future purchases, helps children understand that we can’t always get what we want all the time. Make your back-to-school budget shopping a new tradition. Keep track of expenses and notes in a notebook to see what worked well with your kids and what didn’t. What teachable moments were successful throughout the year?
As our children get older, budgeting becomes even more important so they can begin to understand the “cost of living”. We all want our children to grow into independent, successful individuals and they can achieve this with lifelong financial management coaching.
If you have any questions, please contact me at [email protected]
Melinda Hill is an OSU Extension Family & Consumer Sciences Educator and can be reached at 330-264-8722 or [email protected]