As the new school year is in full swing, so is the school year budget. From supplies to sports equipment, it can be demanding on the wallet. It can also present more opportunities for kids’ “wants” to grow, as they see their classmates’ new things, from trendy water bottles to the sneakers on their feet.

This can make back-to-school season a great time for parents to introduce important lessons about budgeting, saving, and goal setting. Here are some tips to navigate helping children develop smart money habits during this season.

1. Identify Needs vs. Wants

Use back-to-school shopping as an opportunity to discuss the difference between needs and wants. Help your kids understand that necessities, like school supplies, should come first, while wants — like the latest fashion trends — can serve as a motivator for future savings. This will help them make thoughtful spending decisions.

2. Create a Budget

Creating a budget for needs versus wants is a great first step. Involve your kids in listing everything they need — backpacks, notebooks, sports equipment — and those wants they desire —and estimating the costs for each. This teaches them how to plan their spending and understand the concept of limits.

Tip: Encourage them to look for deals or use last year’s supplies when possible. It’s a real-world exercise in managing money wisely!

3. Set Savings Goals

The back-to-school season provides a great chance to explain the importance of saving. Talk to your kids about setting aside a portion of their allowance or gift money for future purchases. Whether they’re saving for a school trip or new tech, having a goal motivates them to save over time.

For older teens and young adults, this is also a good time to introduce them to Sebasticook Valley FCU’s free4ME account, designed for members aged 18 to 25. With no monthly fees, it’s a great way to help them transition to managing their own savings and checking accounts.

4. Open a Savings Account for Them (Managed by You)

One of the best ways to introduce kids to the concept of saving is by opening a savings account in their name, which you can manage on their behalf. This allows them to see how their money grows over time, especially when they regularly contribute from allowances or birthday money. By showing them account statements and discussing their balance (all available online or on our mobile app!), you can help them understand how interest works and the importance of saving for the future. Sebasticook Valley FCU offers a variety of savings accounts that provide a safe and easy way to get started.

5. Teach the Value of Earning Money

Beyond saving and budgeting, it’s important for kids to learn the value of earning money. Encourage them to take on age-appropriate tasks like chores around the house or helping neighbors, and reward their efforts with a small allowance. This helps grow their confidence and independence. For teens, part-time jobs or babysitting can be a great way to start earning and saving for larger goals, like a car or college. Having their own income helps them understand the balance between spending and saving, further preparing them for financial independence.

By incorporating financial lessons into the back-to-school season, you’re setting your kids up for long-term success. Whether it’s budgeting for supplies or saving for future goals, every step counts in building strong money habits. Sebasticook Valley FCU is here to support you – contact us today.