Back-to-school shopping offers a lesson

Involve children in purchase decisions, specialists advise

Diamond Emory (left) compared prices of markers with her 5-year-old son Eric at a Wal-Mart store last week in Canal Winchester, Ohio. Emory and her husband include their children in planning their family budget. (KIICHIRO SATO/ASSOCIATED PRESS)

NEW YORK - 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 aisles of the store near their home in Groveport, Ohio, displayed glittery pencils, 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 like 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 students, 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 even try to 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.

To start a dialogue with your children, consider these tips:

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

2. Help children understand the concepts of saving, investing, and donating - not just spending.

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

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

5. Open 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," 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. The AICPA's www.feedthepig.org site offers e-mailed tips for older children, presented through the eyes of "Benjamin Bankes," a "grown up" piggy bank.