“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.”
About half of parents (52%) say they will spend about the same amount as last year, while 25 percent expect to pay more and 19 percent expect to pay less than last year. More than 1 in 5 parents (21%) say they spend more on back-to-school supplies each year than they are saving for college.
- Twenty-one percent of parents plan to pay between $150 and $200 per child
- Twenty-four percent of parents plan to spend more than $200 per child
- About a third (32%) plan to spend $100 or less
Teens Lack Practical Money Management Experience
Although teens report high levels of confidence in their money management skills – 71 percent gave themselves a grade of “A” or “B” for their current knowledge of financial responsibility – teens have limited practical money management 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, and 63 percent of those who do get an allowance receive between $10 and $50 each month.Teens also lack an array of other money management experiences:
- Sixty-five percent of teens do not plan to help pay for their back-to-school shopping
- Half (50%) of teens say they spend between $5 and $20 each week
- Only 27 percent of teens have a summer job
- 9 out of 10 teens say they are not involved in paying household bills or budgeting
- Eighty-three percent of teens plan to attend college, but 51 percent are not saving money to help pay for college
- Make back-to-school shopping a family affair. Sit down together and make a list of what your teen already has, what they need and how much you can spend.
- Do your homework. Make back-to-school shopping something you do together and use it as an opportunity to teach your teen how to comparison shop. You can also encourage your teen to look at prices online to see how they fit with their budget before you head to the store.
- Crunch numbers together – establish a budget. Consider having your teen contribute money to purchasing school supplies and other necessities throughout the year. Discuss how much they may contribute and work it into your budget. Once you set a budget, stick to it.
- Help set goals and steps to achieve them. The next time your teen gets a windfall—from a gift, allowance or part-time job—ask them if they have a plan for their money. If not, talk about things they might want to save for and how they can create their own budget.
- Participate in the day-to-day. Teach your kids how to write checks, balance a budget and the importance of paying bills on time the next time you pay monthly bills. This gives teens an idea of how much utilities and other necessities, like auto insurance, will cost them as adults.