Back to School Financial Literacy Tips for Parents and Kids

Toward the end of summer, your regular annual trip to the mall – or wherever you conduct your back-to-school shopping – offers an excellent opportunity to open a conversation with your kids about money, show them how overspending can happen, and turn them into bargain shoppers. Back-to-school shopping offers a teachable moment when kids can learn key money management skills, including budgeting, living within one’s means, prioritizing spending, understanding the value of various items, and price comparison shopping. And not addressing these lessons early carries costs.

Costs of Not Learning Key Money Lessons

Today, kids have more temptations than we did at their age. They’re inundated from birth with advertising messages saying “buy, buy, buy!” A typical child has seen more than a million ads by age 21. To counteract this conditioning, it’s essential to teach kids personal finance lessons.

Financial habits form early. We should begin teaching lessons about personal finances when kids are young. If they’re already teens now, that’s OK – getting professional-level training before they move out on their own is critical. Practical, relatable lessons help establish an educational foundation that supports continued financial education as they mature.

What is the value of teaching kids about money when they’re young? Kids that develop poor financial habits formed in childhood are more prone to financial problems later in life. And those financial mistakes carry a high price tag.

Section 1: Planning Guide, Shopping Checklist, & Conversation Starters

  • Together, create a list of back-to-school items they need. Or have the list primarily written, but leave some space available for children to add items to the list. For young children, leave off something important, like “crayons,” and give the child hints as to what is needed on the list (leading them to “crayons”).
  • Before going out to shop, go through advertisements to estimate how much your family will need to spend for each item on the list.

Back to School Financial Literacy Shopping Checklist

Section 2: Discussion Points

  • Discuss ways to save money, such as using coupons, sales, or shopping at discount stores.
  • Brainstorm creative ways to save money. For example, shop at second-hand or outlet stores, find deals online, or do a neighborhood clothing trade.
  • Discuss ways you might overspend, such as impulse buying or choosing high-end brand name products.

Section 3: Post-shopping Discussion

  • After the back-to-school shopping trip, review the receipts. Did your family come in under budget, at budget, or over budget? Why?
  • Each child could be responsible for researching one particular item on their back-to-school list. They can do quality analyses and compare sales ads if available. If they track prices, they can become great bargain hunters.
  • Kids can go find the item they researched in the store and do a price comparison between brands and stores.

Back to School Financial Literacy Tips for Parents and Kids

Reasons to Teach Financial Literacy

Lessons Learned from the FDIC’s Youth Savings Pilot

Americans pay upwards of $120 billion in credit card interest and fees each year, according to the Consumer Financial Protection Bureau (CFPB). Overspending is another common financial mistake – YouGov projected that U.S. consumers would spend $77.3 billion on shopping for luxury items in 2024, with the luxury industry experiencing an annual growth rate of 1.9%. At least 23 million U.S. households pay bank overdraft fees, for a total of $17 billion in any given year.

Lack of knowledge also leads people to fall for the growing rate of financial fraud and scams in the country. As of 2024 the Federal Trade Commission (FTC) reports receiving 5.7 million annual cases of fraud, with 1.4 million of those cases related to identity theft. Total losses from identity theft are estimated at $10.2 billion a year. A case of identity theft occurs every 22 seconds, with a median loss to an individual consumer of $500.

Another common money mistake is buying a new car without taking all the costs into account. Owning a new vehicle has become much more expensive, with average annual ownership costs of $12,182 in 2024 – up from $10,728 the previous year. And according to AAA, a vehicle owner can expect to shell out an average of $1,475 a year for maintenance and repairs.

The NFEC conducts an annual survey asking people to estimate how much money they lost in the previous year due to lack of money knowledge. In 2023, the average estimate was $1,506. And the U.S. Census Bureau found that 11.7% of the U.S. population was living in poverty in 2022, representing 37.9 million people. The bottom line is that lack of personal finance knowledge – also called financial illiteracy – costs Americans a lot of money.