family finances

5 Ways to Save Money on Back to School Shopping

Written on August 14, 2012 at 10:46 am , by

 

Guest blogger Cherie Lowe on teaching your kids about money while saving big on back to school shopping.

The thrill of a shopping victory comes when you see that grossly disproportionate number at the bottom of your receipt telling you just how much money you saved. You totally know what I’m talking about. It’s the kind of receipt you want to show the people in front and back of you in line, as well as the greeter at the door. It’s the kind of receipt that invokes an embarrassing mom dance in the parking lot. And it’s the first thing you show your spouse when you see him next.

Don’t keep all of that giddy pride to yourself. Back to school time is the perfect opportunity for you to teach your tween how to handle money well–and possibly earn her own receipt worth showing off. You’ll need patience and you’ll have to relinquish control, but the byproduct is a money-savvy kid who learns that each penny counts. Here’s how to start:

1. Help your tween evaluate his needs before going shopping. Block off an afternoon to take inventory of what fits, what doesn’t and what he can re-use from last year. After you have a nice stack of items donate or hand down, compile a list of needs. Be sure to take stock of school supplies, in addition to clothes. Rulers, scissors, backpacks, lunch boxes and even USB drives usually have lifespans of 2-3 years.

2. Set two cash budgets: one for clothing, one for supplies. Based on what you’ve spent in the past and what your kid needs, go to the ATM and pull out EXACTLY what you plan to allow her to spend. If you let your kids shop with plastic–even debit, and yes, even if you’re present–they will always spend more.

3. Narrow your shopping venues and clip coupons. Don’t just wander the mall. You and your teen need a plan of attack. Sit down together and decide which stores you’ll hit. Then, google their names, along with the word “coupon,” to see what’s available for both clothing and supplies.

4. Steer your kids towards the clearance. Now’s not the time to buy sweaters and jeans–purchase capris, shorts and Ts, which are on sale now. Most schools start when the weather is still hot. Wait two months to shop for fall and winter clothing; by then, prices will come down substantially. If your kid desperately wants something spiffy for the first day, let her choose one fall outfit. (It can double as picture day attire, too.) But for everyday wear, urge her to choose clearance first.

5. Give them guidelines and set them free. It’s time for the little bird to fly from the nest. If you let your teens know that it’s their money to spend, they might have a different attitude than if you’re paying the bill. So if their shopping list calls for 3 pairs of pants, 2 tops and some socks, let them choose. This is extremely hard, as a parent, but it will make them realize that sometimes you have to decide between one pair of expensive jeans or two off-brand pairs. Obviously, you’ll need to help them navigate their school’s dress code–and perhaps your own household’s possibly stricter dress code. And let’s be clear: They may blow their budget and have to live with it. But you will not be sent to parent prison or turned in to Child Protective Services. And your kids will gain some valuable life learning.

How do you help your tween navigate the back to school aisles?

For more Royal Money Saving Back to School Tips, check out:

Cherie Lowe blogs at the Queen of Free, where she wears a plastic tiara and plans on never growing out of playing make believe.  Through written word and speaking engagements, she has shared the Royal Family’s Journey of Paying off $127,482.30 over the last four years.

An Age-by-Age Guide to Teaching Kids How to Invest

Written on May 1, 2012 at 9:10 am , by

 

By Stacey L. Bradford

Investing can be child’s play. A little wisdom now can lead to long-term gains for your kid’s future.

UNDER AGE 9: As soon as your child grasps the concept of a dollar, start talking about saving and delayed gratification.

1. Implement a weekly allowance. While some parents use it as a reward for completing chores around the house, it can also be a teaching tool to show that earning money is a separate and important skill, says Joline Godfrey, author of Raising Financially Fit Kids.

2. Help kids create a simple budget. Explain the benefits of putting money aside for toys, ice cream outings or other things Mom and Dad usually pay for.

AGES 9–12: Tweens are mature enough to appreciate the concept of using money to make money, says Godfrey.

1. Once your child has saved $100 from his allowance, take him to the bank to open a savings account. Allow him to fill out the paperwork so he gets comfortable interacting with financial institutions, says Carrie Schwab-Pomerantz, a senior vice president with Charles Schwab.

2. Consider gifting your child one share of a publicly traded company that he likes, such as Walt Disney, Microsoft or Coca-Cola (share prices range between $30 and $70), suggests Justin Fulton, a principal at Signature in Norfolk, Virginia. Show him how to monitor the stock’s price online.

AGES 13–15: Teens are ready to grasp more complex financial lessons and may ask if investing is risky. While there’s no guarantee stocks will increase in value, over the past 10 years the stock market as a whole has appreciated 2%; in the past 20 years, 4%. Investing is also the best way to beat inflation, says Schwab-Pomerantz.

1. When your teen has at least $100 that is not earmarked for something else, open a custodial brokerage account and invest the money in an S&P 500 index fund. Buying this sort of mutual fund limits risk (you’re investing in a diversified basket of holdings). Review the monthly account statement with your teen.

2. Evaluate one of your own investment portfolios together. If you’ve been saving for your teen’s education, for example, share that account so she can see the choices you’ve made and how your -money has grown, recommends Fulton. It also helps her understand how much you’ve saved for her college years.

AGES 16–18: Let your teen manage her portfolio. It’s okay if she makes mistakes—the point is for her to get comfortable so she knows what to do when she’s eligible to contribute to a retirement account.

1. Arrange a meeting between your teen and a grandparent, friend or colleague who is knowledgeable about the market, says Fulton. Ask that “expert” if he would be willing to mentor your teen and touch base semi-regularly about her strategy.

2. Encourage your teen to invest in one or two companies or mutual funds. She should research potential investments online—your brokerage firm may even offer free tools.

Online Resources

schwabmoneywise.com: Topics include saving, credit cards and investing, plus definitions of terms such as stocks, bonds and exchange-traded funds.

oneshare.com: Purchase one share of a company for your kid and he’ll receive a framed stock certificate and starter kit.

orangekids.com: Planet Orange, ING Direct’s interactive, space-themed game, teaches kids in grades one through six how to earn, spend, save and invest.

weseed.com: Kids can create virtual stock portfolios and track the real market’s returns.

investopedia.com: From market basics to sophisticated strategies used by day traders, this comprehensive site offers tutorials, definitions and news.

Have you taught your kids to invest? Tell us how in the comments below.

Financial expert Stacey L. Bradford is an award-winning journalist and author. When she isn’t writing, she’s busy teaching her kids the value of a dollar.