Some key back-to-school shopping tips include:   - Have children follow a budget. Stress that getting a more expensive item might mean sacrificing something else.   - Encourage kids to consider ways to cut costs and manage cash flow, like clipping coupons, looking for sales, or buying supplies each semester.   - Teach your kids to comparison shop to avoid impulse buying or paying for overpriced items.   - Differentiate between "needs" and "wants." Ask children to contribute their own money to fill the gap between what they "need" and what they "want."   - Tell kids that if they come in under budget, you will split the savings with them.   - Continue the budgeting lesson by starting an ongoing monthly allowance for your kids.

We've all heard horror stories about college freshmen who sign up for new credit cards only to overspend and end up with bad credit. Theoretically, children should learn how to budget, save and invest in their futures well before college age if they are going to avoid the pitfalls that too often trip up their parents.

According to information from www.AccountingWEB.com, a survey released by Visa showed that only 5 percent of adults learned about the vital life skill of money management in elementary or high school - a "surprisingly low number."

The Visa survey of 1,000 cardholders also found that less than half of people (48 percent) learned about money management from their parents while 41 percent were self-taught or learned the hard way. At the same time, the survey discovered that 91 percent of respondents said they supported requiring financial education be taught in every high school in the country. Currently just fifteen states have some sort of financial education requirement for high school students.

To help combat our nation's financial illiteracy problem, Visa offers parents, students, teachers and consumers of all ages free access to an award-winning money management program called Practical Money Skills for Life.

Available at http://www.practicalmoneyskills.com/, Practical Money Skills for Life comes complete with a "Back-to-School Budget Calculator," an effective, hands-on tool to teach kids how to prepare a budget and spend wisely. The site also contains three new allowance calculators designed to help parents get a better grip on their kids' spending habits while simultaneously giving their children a solid money management foundation based on the following factors: what parents themselves received for an allowance as children, needs-based expenses versus discretionary spending, and saving for a goal.

Of course, what's good for your kids is good for you, too. You might want to take the Money Personality Quiz to make sure you're setting a good example for them.
 
This interactive tool helps you assess and measure different aspects of your relationship with money in the areas of Acquisition, Use and Management. Your answers will be matched to corresponding money management tips and resources offered on Practical Money Skills for Life.

As your children learn about these financial topics, they will also learn about Uncle Sam's role in their budget. If you have tax-related questions, contact our Tax Specialist Crystal Martin at 717-757-6999 or 800-745-8233, or send her an email by using the form below.

 

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