School shopping also is a lesson

Even young children can benefit from money-handing discussions.

NEW YORK (AP) — When Diamond Emory and her daughter Makaiah arrived at Wal-Mart to buy her fifth-grade school supplies, they encountered much to entice a young shopper.

The store near their Groveport, Ohio, home displayed glittery pencils and fancy folders, and “Hannah Montana” and “High School Musical” emblazoned everything.

But instead of indulging her 10-year old daughter, Emory carried a calculator and together they figured out what they could purchase and still stay within their budget.

“We’re watching how we’re spending our money and paying debt down aggressively,” said Emory. “Every penny counts.”

With a household income of about $90,000 per year, Diamond and her husband, Eric, adopted a strict budget for the family early this year. As part of the plan, the Emorys have included their three children in the planning and decision-making that such tight controls involve. They see outings such as shopping for school supplies as a way to help Makaiah and their 5-year-old twins, Eric and Elyse, learn about handling money.

It’s a significant step, because most children are not likely to get any lessons about handling money in the classroom. Just five states require instruction on the principles of money management for elementary school pupils, according to the JumpStart Coalition for Personal Financial Literacy, an advocacy group. Only 20 states require or are considering mandated instruction on the topic for middle school or high school students.

Financial planner Susan Bruno sees back-to-school shopping as a perfect way to teach children a lesson before the first bell rings.

Bruno, a principal at Beacon Wealth Consulting in Rowayton, Conn., said parents can make a game out of the exercise. “It’s kind of fun with younger kids to say ‘What do you think it’s going to cost?’ and then talk through it,” Bruno said.

There are plenty of opportunities to work with children in stores. Even in a tough economy, the National Retail Federation estimates back-to-school spending for kindergarten through 12th grade will reach $20.1 billion this year. But like the Emory family, about 73 percent of back-to-school shoppers are heading to discount stores to stretch their dollars, the NRF said. What’s more, thrift stores such as Goodwill and Salvation Army are reporting stronger sales.

If you’re going to start a dialogue with your children, here are some tips to keep in mind:

UDiscuss the concept of money with even your youngest children. Help them understand that you go to work to provide food, clothing and their toys.

UHelp children understand the concepts of saving, investing and donating — not just spending.

UIn an age of ATMs and online purchases, remember you’ll need to explain to young children how those transactions relate to cash. Explain how credit cards work.

UUse shopping for school supplies, and even regular trips to the grocery store, as opportunities to teach budgeting and understanding wants versus needs.

UOpen a bank account for your children and teach them to save for something they want.

There are numerous online resources available to help parents walk through money basics with their children. One that has a feature for young children is Pittsburgh-based Huntington National Bank’s “virtual backpack,” where children can choose different school supplies to put in their backpack, while watching the total amount they’re spending climb. It can be found at www.huntingtonforschools.com.

The American Institute of Certified Public Accountants offers a range of tools online for parents and children. At www.360financialliteracy.org, there are articles about how to teach children of various ages about money and tools to help. The AICPA’s www.feedthepig.org site offers e-mailed tips with money management tips and podcasts for older children, presented through the eyes of “Benjamin Bankes,” a “grown up” piggy bank.

Though she ended up spending a bit more than her $185 budget, Emory said she found that involving the children has engaged them, and they now want to be a part of the effort that began in January to pay off about $40,000 in debt. “Bringing the kids in helps them understand why we can’t go to Chuck E. Cheese this week,” she said. “They begin to help you look for bargains.” Her children have even gone through their toys and other possessions to identify items they want to sell in a garage sale, she said.

“They love helping,” she said. “Kids just want to feel a part of things. It’s so much better than just saying, ‘No.’”