Back to School Shopping Can Become Lesson in Finance

Back to School Shopping Can Become Lesson in Finance It’s that time of the year again when parents and children go shopping for school materials. With the economic recession, parents have to be extra careful with their purchases and plan them thoroughly to stretch their dollars. This could, at least in theory, provide an opportunity for parents to teach their children a lesson in personal finance and money management. In fact a lot of parents believe this is what they are doing. However, recent research seems to tell a different story.

While the majority of parents (69 percent) think they are doing enough to educate their kids on money matters, when asked a similar question less than half of teens say they have worked with their parents to develop a budget for spending and saving money. It seems like teens are lost in translation when it comes to hearing what their parents have to say on finance.

These are some of the findings in Capital One’s latest Back-to-School Shopping Survey of parents and teens. The survey included 1,064 interviews with 564 parents of teenagers aged 11-17 and 500 teenagers, aged 11-17 across the United States.

“Back-to-school shopping season is a great opportunity for parents to help influence money management habits in their children that can last a lifetime, as we know our childhood experiences shape our adult attitudes about money,” said Shelley Solheim, Director, Financial Education, Capital One Financial Corporation. “Many parents say they’re talking with kids about important concepts like wants vs. needs this shopping season, which is great news, but parents can further reinforce those practices by building a shopping budget with teens, discussing priorities and trade-offs, and comparison shopping together to get the best deals.”

Another revealing data the report sheds light on relates to teens’s perception of their own money management skills. 71 percent of them gave themselves top grades for their skills in terms of financial responsibility. But reality shows they have limited practical experience. Fewer than half of teens have worked with their parents to develop a budget for spending and saving, even though 62 percent of teens report receiving an allowance.

The report offers several tips on how to make the most of the back-to-school shopping season and teach teens valuable lessons in money management. These include making the back-to-school shopping a family affair, comparing prices by shopping around before completing purchases, establishing a budget and goals and generally involving teens in paying bills and making them aware of the cost of living.

Image credit: Capital One