Back-to-school shopping: Use it to teach kids about money
Tax-free weekends kick off in many states this month -- several start Saturday -- just in time for back-to-school shopping. Parents should spend wisely, experts say, by seeing what is already available in their home, buying when items are on sale, and creating a budget and sticking to it. It's also a chance to teach children important money lessons. Here are six money smart lessons for kids:
1. Value of money
Learning the value of money can happen as young as 4, says Hollis Page Harman, financial educator and author of Money $ense for Kids! “I start out with our currency – which are bills and coins – and each one tells a story. You don’t need to know how to read.”
The sooner kids start to understand what money is, the better they will understand and respect money later, she suggests. “Now they have a relationship with it, and they’re very invested in its cosmetics, so when they then learn how to divide it up … they have a relationship that we never had with money.”
Things get a bit more complicated when using a credit or debit card or even a check, especially for some younger kids.
When children see more checks in a checkbook or several plastic credit cards in a wallet, they can easily assume that there is endless money to be spent, says Barbara Wollan, family finance program specialist at Iowa State University Extension. Parents should continually explain to their children how a check and credit or debit card work and how they carry the same value as cash.