Before you shop

Review these tips:

  • Set a realistic back-to-school budget before you go shopping.
  • Have your kids prepare a budget with you.
  • Take a printout of your estimated budget with you when shopping and have your child enter in all of the actual expenses.
  • Encourage children to follow the budget. Stress that getting a more expensive item might mean sacrificing something else.
  • Encourage kids to consider ways to cut costs and manage cash flow, like clipping coupons, looking for sales or buying supplies each semester.
  • Teach your kids to comparison shop to avoid impulse buying or paying for overpriced items.
  • Differentiate between "needs" and "wants." Encourage children to contribute their own money to fill the gap between what they "need" and what they "want."
  • Tell kids that if they come in under budget, you will split the savings with them.
  • Continue the budgeting lesson by starting kids with an ongoing monthly budget.

Back-to-School Budgeting

Ah, back-to-school time: the smell of newly sharpened pencils, fresh crayons and flowing cash. If that third one's got you down, take a look at these tips for creating and sticking to a back-to-school budget. While families spend on what they need, parents must also work with their children to determine what they really don't need.

Start early, and take time to get ready. It doesn't take much to turn the school's supply list into a full-on shopping list. But you can do better than that.

Before you buy even one notebook, estimate how much you can afford to spend overall and what the costs are likely to be. Don't leave anything out! It's better to know ahead of time if things will be tight. (Keep reading for a bunch of creative ways to handle a shortage.)

Give some thought to what you'll do with any extra money in the budget. Will the kids get something special from their mile-long wish lists? Or will the surplus be added back into the household budget?

Think ahead to find the best deals. Be on the lookout for the big back-to-school sales and go early. Even the big stores can sell out at the last minute.

How realistic is your budget? Try our back-to-school calculator to find out!

Get the kids involved. And not just with the shopping. Have them join in as you prepare; they'll learn great lessons about budgeting, finding a good deal, and the difference between wants and needs.

Younger children can help cut coupons (with safety scissors, of course). And older kids can compare costs and tally them up. You might even put them in charge of looking for deals to stay under budget. Use back-to-school shopping as an opportunity to lay the foundation for helping your children develop sound money management habits early.

Be willing to compromise on a few things. Sure, kids will want to have the same cool stuff their friends do. If your budget has the room, you can help them learn to prioritize.

Talk to them about how choosing a more expensive item means they'll have to go cheap on another item, and give them a chance to think their choices through. If they have money of their own, you might ask them to help fund that special lunchbox or name-brand backpack.

Get creative to slash the shopping bill. There's a good chance school clothes will take up the biggest chunk of your back-to-school budget. But who says they have to be brand new? Trade clothes and books with other families, or hit the thrift stores and garage sales. If school uniforms are required, check whether the school has a trading or discount program.

Buying online? Play it smart! Order together with enough friends to get free shipping. Or buy bulk packs of supplies to share. You might also find a steal on eBay or Craigslist.

Shop the sales. It seems that sales for back to school get earlier and earlier. Before you recycle those weekly newspaper ads, scan them for retailer's sales on clothing and school supplies. Watch for coupons online, postcards and in the mail, and in-store promotions to look for deals. Some items are worth scooping up on the spot, while you might wait for end-of-season sales to replenish your kids' closet and bookshelves. For big ticket items like electronics for your older kids, do your homework on price comparisons before giving in and buying the coolest new laptop for your teen.

Smart Shopping

Learn from the experience. Make your savvy back-to-school approach an annual tradition. Keep track of this year's expenses to help figure out the budget next year. Keep notes about what you discover, like where the best thrift stores are and when the store shelves start to empty. They'll come in handy a year from now. And if your kids' cost-savings decisions help you come out ahead, use it as a teachable moment to talk to them about what to do with the money that was saved.

Practice these smart shopping habits each year, and by the time the kids graduate, you'll have saved a bundle. And they'll be much more prepared for the real world.