New backpack, new school supplies, new clothes and sneakers…back-to-school season brings excitement for kids, but often financial stress for parents. As inflation, tariffs, and stagnant wages continue to impact household budgets, many families have been feeling the squeeze when it comes to back-to-school shopping and other essentials this year.
Whether you have young kids in need of what seems like every school supply item under the sun, or older tweens/teens itching to shop for the latest (pricey!) trends, the strain on parents’ wallets is very real — and can be difficult to acknowledge. While it might be tempting to shield your child from any financial worry you may be experiencing, resist the urge to keep quiet. Experts suggest that age-appropriate conversations about money can actually help kids develop financial literacy. These discussions can transform tough circumstances into valuable teaching moments that prepare your child for their own financial future.
How to have the “money talk”
It’s important to be honest and keep your chat age-appropriate, but honesty doesn’t necessarily mean taking the blunt approach. Money for extras may be low and you can’t buy all the things they want, but if your older child is concerned about what that means for your family, try one of the following phrases:
- “As a family, we’re going to figure out the difference between the things we want and the things we need.”
- “We’re going to put our money toward the most important things first.”
- “We’re taking a ‘spending break’ to make sure we have enough for everything we need.”
Younger children may not understand the longer-term financial implications, but they can still comprehend one of these kid-friendly ways to explain budget constraints:
- “We’re playing a ‘needs vs. wants’ game with our money right now.”
- “Our family is on a spending adventure where we only buy what we really need.”
- “We’re becoming super money heroes who save more than we spend.”
Finances as a family affair
You can include your child in basic financial decisions at any age. Before going on your weekly shopping trip, you can check out the circular or grocery store shopping app together to see what’s on sale before deciding what to make for dinner. Or you can ask for your kid’s help in making budget-based decisions that affect them directly. Rather than just giving a flat “no” to the items on their wishlist, explain how your budget only allows them to get either one pair of pricier sneakers or two pairs of cheaper shoes. That can be a good segue into a conversation about why some things cost more money. Ask your kids to help you compare prices and think more about the products they want. Is it essentially the same item as a lower-priced version, but costs more simply because it’s a name brand?
By talking openly about money, you’re not just managing the current financial squeeze we’re all experiencing — you’re also equipping your child with essential life skills. Having honest conversations can help your kids develop healthy financial habits that will serve them throughout their lives. Even during challenging economic times, the financial literacy you’re building together may be one of the most valuable gifts you can give your children.
