Back to School Season When the Money is Tight

It’s back to school season and parents who are struggling financially may not be able to fulfill their child’s back to school wish list this year.  Managing your budget and managing your child’s expectations can be tough. Here are some tips on how to talk to your kids about your financial situation and how to handle the pressures other students may put on them to have the latest and the greatest.

Don’t feel pressure to conform and spend more money to avoid having your child be an ‘outcast.’ 
 It is an important lesson for children to learn that we can't have everything we see and want. Teach them the difference between wants and needs. Children should learn that purchases need to be saved for and cannot be bought impulsively.  Just as adults should be budgeting to avoid overspending, children too can be taught to put money aside. Teach children some basic principles about how money should be put aside and saved for whatever item or special purchase they may want in the future.

Explain why you can’t get them the item they want in open, honest but simple terms.
 Explain to them that Mom and Dad work hard for their money and have certain responsibilities and obligations that are more important than the item they want (such as: food, electricity, TV, water, ect.) Talking openly and honestly with your children about your finances can be difficult, but valuable lessons can also be learned from you as parent and teacher. Children do not need to know the details of what you as a parent owe or how much you make, a general understanding of the source and expenses is enough. Discussions should be kept positive, open and more matter-of fact. Family spending and finances should not be a topic that becomes a burden to children.

Explain that not everything can (or should) be charged to a credit cards
Children rarely understand what a credit card really is, so many times when you say you don’t have the cash or money on you for the item now they may reply that you why can’t you just use the credit card.  Explain to your child that when using a credit card although you didn't pay now you will have to pay later.  Let them know that these payments include more money called interest and that credit cards are really a loan.

Practice what you preach                                                                                 
As a parent, one of the most important things that can be done is to practice what is taught. Look at your own spending habits and make it a point to be frugal and manage money more effectively.   If you are telling your children that you don’t have the money to buy them the designer jeans they want you shouldn’t go out and buy the designer jeans you want either! They will learn from you through observation so make sure you are practicing what you preach. 

When sending your child back to school, if they are not equipped with the latest and greatest they may feel ashamed and embarrassed.  Telling them to try ignore these things is easier said than done since peer pressure on kids to fit in is great. Try helping your child to be independent, offer them realistic solutions like if they really want something they can start saving for it on their own.  Depending on the age, explain to them that saving up for an item and working hard to get it will make them feel more accomplished for earning the item all by themselves.  The item will have more worth and value than ones that were just bought for his/her classmates!