August is here. For parents, this is usually the time of year spent getting their children back to a school-friendly bedtime routine and combing store aisles for school supplies.
In 2020, there are bigger questions to think about – including whether to send kids back to school at all. But no matter what back-to-school season has in store for your household, a budget can help put some of your worries to rest.
It’s also an opportunity to pass on valuable financial lessons. Here are three worth sharing:
- Budget before you buy. Use the time prepping for the start of school to acquaint your children with the fundamentals of budgeting. Although they may not appreciate the value of mortgage payments, college savings or utility bills, even youngsters can understand the difference between needs (a $5 notebook) and wants (a $12 SpongeBob notebook).
To demonstrate the bigger picture, use a visual – like a pie chart or a stack of quarters. Then explain how you allocate income among necessities (like rent, utilities, groceries or insurance), savings (for college or retirement), and everyday spending. Go through the items on your shopping list and work together to set a spending limit.
- Shop your closets – or secondhand. Most school supplies have a shelf life of more than one year. Go back through last year’s colored pencils, erasers, clothes, backpacks and so on. Could you refresh that backpack with a quick wash? Sharpen those pencils? Set aside those shoes for a younger sibling to grow into? Expensive items, like scientific calculators, clothes, shoes and office furniture, can cost much less at thrift stores
The adage “a penny saved is a penny earned” is a good way to introduce the concept of saving and sticking to your budget. Let’s say your daughter really wants a new set of colored pencils, but also wants a purple backpack that costs $15. Explain that sharpening the pencils you already have would save about a dollar – then, after she sharpens the pencils, give her a dollar to put in a piggy bank to save for something else she may want later.
- Shop strategically. After several months of empty aisles, retailers will want to lure you back into the shopping spirit with deals on back-to-school “necessities.” But you may not need to buy everything at once. Research prices in advance, carry a list and set a strict dollar limit that you won’t exceed in the store. If you plan to do your shopping online, consider mastering digital couponing for extra savings.
As you shop, check in with your budget regularly. You can do that by sitting down with a pen, paper and a bank statement – or you can use a mobile banking app like Axiom to track your balance in real time.
Budgeting takes planning, focus and discipline. But the reward is financial security and confidence, no matter what the future brings – and that’s something worth passing on to your kids.
Axiom Bank, N.A., a nationally chartered community bank headquartered in Central Florida, provides retail banking services, including checking, savings, money market and CD accounts, as well as commercial banking, treasury management services and commercial loans for both real estate and business purposes.