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Back-to-school shopping is good time to talk about money with children


Linda Geist
University of Missouri Extension
Phone: 573-882-9185

Published: Tuesday, July 23, 2013

Story source:

Janet C. LaFon, 417-358-2158

Back to School

CARTHAGE, Mo. – Back-to-school shopping can be a good time for children to learn about money management.

“Many families are busy buying new clothes, shoes, book bags and school supplies. Then when school starts, there will be more expenses: school lunches, after-school snacks, fees for extracurricular activities – the list goes on and on,” says Janet LaFon, University of Missouri Extension family financial education specialist.

All these expenses present opportunities for parents to talk to children about how to use money wisely.

LaFon suggests parents start by looking at where children get their money. This is usually from one of three general sources: cash gifts, earnings and allowances.

According to LaFon, each of these can be used to teach children money management skills.

Gifts and earnings

Cash gifts, often received on birthdays and holidays, are surprise money and shouldn’t be included as a part of day-to-day expense money. “Children should be given leeway to spend it as they wish. However, parents can discuss with children ideas for how the money can be used,” said LaFon.

Earnings may come from household chores or from jobs outside the home. The amount received for various tasks should be agreed upon by the parents and the child.

“When children are old enough to work outside the home, they still need guidance in money management,” LaFon says. “Teens should begin developing longer-term financial plans and an adult awareness of money, work, time and their own needs.”


An allowance is a child’s share of family income and should be used as the child chooses on certain defined expenses. With an allowance, children can have some hands-on experience with managing money.

“They can plan their spending and learn to set some money aside for future use,” LaFon said. “Allowances can help children learn that money is limited, that income must first cover needs and that the family’s financial situation affects the amount of money each member can use.”

An allowance should be enough to cover necessary expenses, as well as some discretionary money for the child to spend as he or she chooses.

“When starting an allowance, parents should teach children how to set up a spending plan, keep records and set money aside for savings. It is important to gear the information toward the age and ability of the child,” she says.