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It’s back to school again, a time when social pressure for kids is matched by
financial pressures on parents.
The visit to the school supplies shop is
something most parents dread; in addition to all the books and school uniforms
that need to be purchased, there are all the extras that can be very expensive.
The pencil cases, diaries and bags can range from reasonable to high prices, and
your kids may not agree with your choice.
So how do you find the balance
between keeping your spending in check and allowing your kids some freedom to
choose what they want? A great way to deal with this challenge, boost their
self-esteem and increase their financial IQ is to involve them in the
decision-making process. Explain to them that the budget for schooling is X,
which is divided into books and clothing (Y) and accessories (Z). While you may
not have much control over X and Y, you can be more flexible in
Explain to your children how much is available for accessories, and
make a list of everything they need to buy. Allow them to prioritize and decide
what is really important to them. Maybe your son really wants a Batman pencil
case and is prepared to have cheaper notebooks and pencils to be able to afford
it. If your daughter has her heart set on a specific diary, find ways to cut
back on some of the other accessories.
If you think your children’s
priorities are wrong, explain it to them. But it is important to respect their
opinion and allow them some degree of choice. For older children, let them make
the priority list.
You can give them the money to let them spend how they
want, with the condition that all items on the list need to be
You will be surprised how resourceful children can be when given
this task. Parents need to use their discretion to determine whether their
children can go shopping by themselves.
Our experience as family
financial advisers has shown that as soon as children are involved in the
decision-making process and are given some responsibility, they are less likely
to feel deprived; instead of having a decision imposed upon them, they become an
active partner in the decision-making process and are less likely to reject the
Another issue that comes up around this time of year is
brand-name clothing and fitting in with your peers. What happens if everybody in
the class is wearing a brand-name item of clothing and your child desperately
wants it. Is there any way to resolve this situation? If you have the budget for
it, and you want to buy it, go ahead; money is there to be enjoyed. If you don’t
have the income to buy that expensive item but you want your child to have it,
tell them you will put it on your priority list for next month.
children will realize that you are listening to their requests and are finding a
solution rather than just saying no. It is very important that after negotiating
with your child and agreeing to buy something the next month, that you keep your
side of the bargain.
We recommend not using the item later on as
bargaining material – “If you don’t clean your room, I’m not going to buy Y” –
because this is detrimental to your child’s relationship with
Another solution is to come to an agreement that you are prepared
to give half the amount and they contribute the other half. Hopefully they have
some savings from pocket money or from working.
Also ask them to do
market research to find the best place to buy this item; most of this
information can be found on the Internet or you can introduce them to Ebay. See
if they (or you) can find an alternative way of getting the item – a birthday
gift, a gift from grandparents, etc.
Even if you have the money to spend
on expensive items, consider whether they are really something you value. It is
important to teach children the value of money and spending wisely, no matter
what your income level.
We strongly recommend that you don’t go into
overdraft to buy your child the brand-name item; it’s detrimental to your bank
account and is a dangerous financial spiral to be caught in. While you are still
paying for the overdraft fees, your child might outgrow the brandname item and
ask for another one.
If you can’t afford to purchase the item or it is
not high on your priority list, what happens? Here’s an important lesson: Far
more important than having the item is having a healthy attitude to money,
understanding how to prioritize within ones means and being content with what we
Although children might initially be upset that they are not
getting XXX, if they are party to the decision-making process, and if you are
open with them and explain why a particular item is not on the shopping list, it
is easier for them to move on than if they were not involved at all, and they
will feel less deprived.
George Orwell writes in Animal Farm: “All
animals are equal, but some are more equal than others.” As adults we are aware
of the difference between people in all aspects of life, including financial. An
important lesson to instill in children is that in life we don’t always get what
The greatest gift we can give our children is to help them
accept who they are, no matter what their financial situation is; to teach them
to be themselves and not be jealous of others’ material possessions. This will
give them a skill for life far more important than keeping up with peer
pressure. They will learn to be content with what they have. As it says in
Pirkei Avot: “Who is rich, he who is happy with his
lot.”firstname.lastname@example.org email@example.com Rifka Lebowitz and
Suzy Kahati are family financial advisers.
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