September is coming, and so is the time to return not only from vacation, but also for kids to return to school. …And with a new school year, there are expenses ahead of us parents! Maybe we should use this time to teach our children about budgeting?
Back-to-school shopping can be overwhelming. When you’re wandering through stores and stationery stores or browsing endless online offers, it’s hard to resist buying things you don’t really need and it’s very easy to throw something extra into your basket… and the offers and “goodies” are very tempting because they’re so cool and pretty. They tempt both us and the kids. I’ll admit that I have a particular weakness for stationery purchases: colored markers, notebooks, pencil cases, notepads, notepads – I’ve loved them since I was a child!
I would love to choose everything myself for the Groom, but I've already learned that this isn't the best idea for at least two reasons.
The first is that my Son already has his own tastes and preferences. He likes other things, which must be respected... and today I also know from experience that he will be less willing to use pens, markers, notebooks or clothes that do not really suit him. When he chooses himself and something turns out to be wrong, he also learns to make better decisions as a result.
The second, and even more important reason for me, is that if I do all the school supplies shopping myself, I'm missing out on a great opportunity to teach my child how to budget and spend money. Back to school is a great time to start talking to your child about money and the expenses that come with the new school year, and to let your child manage the budget in its entirety, or a significant part of it.
I also encourage you to take advantage of this opportunity to teach your children about budgeting and money management. By involving them in this process, you can give them the skills they will need to make smart financial decisions in the future.
How to do it? Here's a proven recipe:
Before you hit the stores or shop online, sit down with your child and make a list of everything they need. Divide the items into categories and then allocate a budget for each category.
You can do this on a piece of paper, in an app on your phone, or in a very simple spreadsheet on your computer.
It's also a good time to talk about what's most important and what your child actually needs to start, what you can buy later, and what you can give up because last year's backpack, pencil case or some of the school supplies are still great.
At this point, it is also worth talking to the child about what is worth buying of better quality, because it will last longer and next year you will not have to incur this expense, and also explain to the child that if, for example, he or she wants a more expensive backpack, he or she must give up other, less important or necessary items.
I am a supporter of the approach that we talk openly with our children about money and the total costs that we incur and that we have to earn. Money, expenses should not be taboo in the family, and the approach "we don't talk about money with children" does not help the child to manage their finances sensibly. Remember! It is much harder to change bad financial habits when we are adults.
So let's plan together with the child these one-time expenses for the start of school, but also let's take into account the long-term ones for the following months. This will also give us a pretext to return to the topic of school expenses and budget together in the following months. We will add new things together, as they appear.
You can include expenses such as extracurricular activities, extra-paid school trips, celebrating friends' birthdays and buying gifts related to them, or your own birthday party for friends, seasonal clothing swaps for your child... as well as a budget for holidays, vacations or joint celebrations of successes during the school year. Let's decide who of us - the child or the parents will manage a given budget category. Let's not be afraid to give part of the budget directly to the child's management. Let them have at least one position throughout the year that they take care of. Depending on the results, we can pass on to the child subsequent categories during the year. Our trust in their decisions grows - they get more financial responsibility and independence.
Once you have determined which categories your child will manage, give them the money you have written into the budget.
It can be cash, although I highly recommend opening an account for your child for this purpose and allowing them to pay by card, Blik or transfers in the app.
Why? It's simple! Our children already live in a world of mostly electronic money, so they need to learn how to control it and use it rationally.
Establish the rules – what the money is for (specific category, store), how it will be spent (plan and list), and that after each purchase the child should write down the expenses and update the budget.
You will see that when your child has to pay for an item with money from their own account, card, or wallet, they will learn to make informed decisions much faster… especially if they have access to a banking app where they can see their account balance and expenses on an ongoing basis.
With this approach, your child will learn to prioritize the products they need most and save money for other events or essentials.
Managing a specific budget and having access to money and information makes it easier for children to see how much money they have at the beginning and after shopping, especially if you visit several stores.
A common question that comes up here is: should you immediately entrust your child with the entire shopping category, or just a section of it in a specific store? You have to make this decision yourself. In my opinion, it depends not so much on the child's age, but on how well they have managed their "small budgets" before, how they deal with the money they receive - how independent and self-reliant they are on their financial path. It will be different if you start with this exercise at all, and different if the child already participates in planning and settling the family budget or has their own money and categories (for example, toys) that they manage.
When you shop, involve your children in comparing prices and offers. Show them how to look for discounts, promotions on websites and seasonal sales, how to check leaflets, promotional coupons.
This activity helps them understand that prices for similar products can vary and teaches them how to make informed decisions about where they shop.
Thanks to this, the child will learn how to find opportunities and not overpay where it does not make sense. This is also a good time to talk about the credibility of sellers or online stores, guarantees or warranties and that sometimes it may pay off to pay a little more, but buy with a guarantee or from a trusted and proven seller.
Make a plan – where, in which store, what exactly you will buy. Remember – a well-prepared list always allows you to stick to your budget… always! This way you teach your child to shop with a list. It can be on a piece of paper or in an app on your phone – it doesn’t matter that much anymore. It is important to make a list for each store and take it with you… and most importantly – stick to the list when collecting things in the basket.
It’s easy for kids to get carried away. A Back To School budget is a great exercise for both of you to stick to your plan. Encourage your child to monitor their spending, prioritize needs and wants. After shopping – write down your expenses, add up categories, update the budget for how much is left.
Make sure that if your child goes over budget for one item, they will need to adjust (reduce) their budget for another item on the list – this will help them learn a valuable financial management skill.
It is extremely important to help your child be consistent and stick to their budget. Even if they are very tempted - don't add more ;-), don't add more. If your child sees that you are letting them go over budget this time, they may start to think that a budget means that they can spend more if they find something they really love or like a lot.
Remember, this is training for your child to prepare them for financial success in the future. Consistency is key!
If it's getting tough to stick to your spending budget, give your child ideas on how to make some extra money. They can clean up their stuff and put up for sale things or toys they no longer use or clothes that are too small. They can look for some extra income - maybe if they prepare and put up for sale your unused clothes online, you can split the profits? Look for ideas and solutions together.
Throughout the process, use positive reinforcement to encourage your kids to stick to their budget and maintain a mindset focused on planning and analyzing results. Remember – praising, raising awareness, and reinforcing patterns where they did well will work much better than “nagging” them when they overspend somewhere.
It's not about keeping quiet about such situations and not talking about them with your child. Talk - just base it on facts, ask questions, let your child draw conclusions, reinforce positive reflections. It's the child who should evaluate their decisions and behaviors, not you who should evaluate the child when they get into trouble.
Also, create incentives for your children to stick to the budget, for example, by offering them a special reward. A walk for ice cream, a trip to the cinema or a swimming pool always works great for us. Choose an additional after-school activity that gives you a lot of joy. Let sticking to the budget be rooted in your child with positive emotions, and not be a sad obligation.
After shopping, always take a moment to sit down with your child and discuss what you bought and why you made certain choices. Teach your child how to use what's left in their budget to save or even plan for future needs (the Pekao PeoPay Kids app, which they get with their Bank Pekao SA account, is great for this).
Explain how short-term and long-term goals and planning can significantly impact their future financial well-being.
Make regular updates to the remaining budget categories and expenses during the school year, plan expenses, update expenses, summarize categories. There will also be surprises during the year – unforeseen expenses. This will be a great time to teach your child how important it is to have savings and not spend everything at once.
Plan some moments of celebration along the way! High-five each other and congratulate each other on successfully completing your plan. Talk about the benefits of setting a budget and preparing in advance. It's not just about the satisfaction of having new, cool things, but above all the satisfaction of making thoughtful and purposeful financial decisions and saving for the future.
Celebrate the fruits of your budgeting work, even if it’s with a festive family dinner prepared together, and encourage your child to use the skills they’ve acquired when making future purchases.
Back-to-school shopping doesn’t have to be a stressful season or experience. It can be a great opportunity to teach your child valuable lessons about money that they will treasure and use throughout their lives.
By spending some time planning a budget, looking for opportunities, planning savings, you can teach your children budgeting and money management skills that they can successfully apply in their daily lives. By choosing the right tools, apps, and accounts, you can smoothly teach your child a rational approach to money and spending during the school year.
Let this be the year your family learns to have fun and enjoy budgeting during the back-to-school season.