Careful shopping teaches kids how to manage money
By Eileen AJ Connelly
Associated Press
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NEW YORK — When Diamond Emory and her daughter Makaiah arrived at Wal-Mart to buy her fifth-grade school supplies, they encountered much to entice a young shopper.
The aisles of the store near their home in Groveport, Ohio, displayed glittery pencils, fancy folders, and "Hannah Montana" and "High School Musical" emblazoned everything.
But instead of indulging her 10-year old daughter, Emory carried a calculator and together they figured out what they could purchase and still stay within their budget.
"We're watching how we're spending our money and paying debt down aggressively," Emory said. "Every penny counts."
With a household income of about $90,000 per year, Diamond and her husband, Eric, adopted a strict budget for the family early this year. As part of the plan, the Emorys have included their three children in the planning and decision-making that such tight controls involve. They see outings like shopping for school supplies as a way to help Makaiah and their 5-year-old twins, Eric and Elyse, learn about handling money.
It's a significant step, because most children are not likely to get any lessons about handling money in the classroom. Just five states require instruction on the principles of money management for elementary school students, according to the JumpStart Coalition for Personal Financial Literacy, an advocacy group. Only 20 states require or are considering mandated instruction on the topic for middle school or high school students.
Financial planner Susan Bruno sees back-to-school shopping as a perfect way to teach children a lesson before the first bell rings.
Bruno, a principal at Beacon Wealth Consulting in Rowayton, Conn., said parents can even try to make a game out of the exercise. "It's kind of fun with younger kids to say 'What do you think it's going to cost?' and then talk through it," Bruno said.
There are plenty of opportunities to work with kids in stores. Even in a tough economy, the National Retail Federation estimates back-to-school spending for kindergarten through 12th grade will reach $20.1 billion this year. But it's worth noting that, like the Emory family, about 73 percent of back-to-school shoppers are heading to discount stores to stretch their dollars, the NRF said. What's more, thrift stores such as Goodwill and Salvation Army are reporting stronger sales.
If you're going to start a dialogue with your kids, here are some tips to keep in mind:
There are online resources to help parents walk through money basics with their kids. One that has a feature for young children is Pittsburgh-based Huntington National Bank's "virtual backpack," where kids can choose different school supplies to put in their backpack, while watching the total amount they're spending climb. It's at www.hunt ingtonforschools.com, where the bank also offers details on other personal finance topics.
The American Institute of Certified Public Accountants offers a range of tools online for parents and kids. At www.360 financialliteracy.org, there are articles about how to teach children of various ages about money, and tools to help. The AICPA's www.feedthepig.org site offers e-mailed tips with money management tips and podcasts for older kids, presented through the eyes of "Benjamin Bankes," a "grown up" piggy bank.
Though she ended up spending a bit more than her $185 budget, Emory said she found that involving the kids has engaged them, and they now want to be a part of the effort, which began in January, to pay off about $40,000 in debt. "Bringing the kids in helps them understand why we can't go to Chuck E. Cheese this week," she said.
