Back-to-school: Pencils vs. iPads
Back-to-school budgeting is a good place to start the lessons. You're prepared to buy notebooks and your kid expects an e-reader.
Your back-to-school shopping list for your teen may include pencils, notebooks and a couple pairs of jeans, but she has other ideas: She wants a cell phone, computer or e-reader.
Can she spell "only if you spend your own money"?
Capital One's annual back-to-school survey found some differences in expectations between teens and parents about back-to-school shopping.
In a press release, Shelley Solheim, Capital One's director of financial education, put it this way:
This year's survey found several gaps in budget expectations and communication between parents and teens regarding back-to-school shopping plans. Back-to-school shopping season is often overlooked as a financial education opportunity, but it's an optimal time for parents to teach teens about budgets and smart spending in a real-world situation.
Our sentiments exactly. Back-to-school shopping presents a perfect opportunity for parents and kids to talk about money and budgets, as we noted even before we read the results of this survey.
We advocate allocating your teen a certain amount of money and letting her decide how to spend it. She NEEDS a new cell phone? Then she'll have to say no to new clothes. The key to making this work is refusing to bail out your kid if she runs out of money.
Capital One's survey of 1,000 parents and teens 13-17 found that 25% of teens listed a cell phone, computer or other electronic device among his or her top back-to-school purchases. Only 14% of parents listed those items as priorities.
Perhaps the two groups disagreed over how the back-to-school money would be spent because they had not yet discussed the issue.
The survey found that only 24% of parents had created a back-to-school shopping budget with a child and only 31% had created a shopping list.
It's not too late. Make it clear that the Bank of Mom and Dad has limited funds and strict overdraft penalties. And then enforce them. If your child is old enough for a cell phone, she's also old enough to make a contribution toward the bill -- and follow your rules about how the phone is used.
The teens told Capital One that they want to learn more about money from their parents, but they're not getting the lessons. Among the findings:
- 53% of teens want to learn more about managing money, and the majority would prefer to learn from parents rather than books, friends or a personal-finance class.
- Only 27% say they discuss money regularly with their parents.
- Only 46% of the teens receive an allowance.
- 33% have a checking account. Of those teens, 70% say their money-management knowledge is "good" or "very good," compared with 58% of the teens without checking accounts.
The survey found one other area in which the kids and parents disagreed: 52% of teens say they expected to spend some of their own money on back-to-school shopping, but only 19% of the parents expect their children to help pay.
Parents, listen to your kids: They really do want you to teach them about money management. Even if you make them buy their own cell phones. Really.
How do you teach your kids about money management? How did you learn? Did your parents provide good lessons or did you have to learn outside the home?
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