school shopping

A new school year is an ideal opportunity to teach more than what’s in the textbooks. Parents can impart some real-life personal finance lessons during the back-to-school shopping season.

As the second-biggest shopping season of the year, the back-to-school period can test buying plans and budgets. Use this challenge to show how shopping isn’t just spending money; it’s economics in action.

Setting Records—and Expectations

Parents will spend a record amount this year on back-to-school clothing and supplies: $873 on average for K-to-12 students and $1,124 for college students, according to the Rubicon Project Consumer Pulse Survey. That’s prime time for a personal finance lesson, say Michelle Balconi, a renowned economist, and Arthur Laffer, an economist and former economic advisor to President Reagan. They cowrote “Let’s Chat About Economics,” a book for parents to read to elementary schoolers about basic economic principles. Balconi suggests talking about the difference between need and want and making shopping lists for must-have and wish-list items. This exercise can illustrate opportunity cost, says Balconi, “which perfectly identifies the concept of choice. You make a choice and see what you’re giving up.”

One-Stop Shopping Is Now Nonstop

Back-to-school shopping no longer ends in August, but stretches into September and even October, according to the NPD Group, a market research firm. Many parents also shop online after the school year begins. Retailers, advertisers and hopeful kids will be aiming to pry more out of family wallets. The lesson? Explain “scope creep,” which occurs when you buy things that weren’t on your original shopping list. Then prevent scope creep by making shopping goals that are clear, specific and inclusive of extra supplies teachers request. Then set a budget.

Maximizing Investments

If you have a budding clotheshorse who could happily never repeat an outfit, challenge him or her to repurpose last year’s pieces that still fit into new ensembles for a lesson on extracting the greatest return on investment. Sites such as Pinterest and Polyvore can spur useful ideas. Help still-growing children sort clothes into piles of what still fits and what doesn’t. Buying new clothes when old ones perform the same purpose also can illustrate opportunity cost. Buying previously owned (used) clothes can also be in vogue for some age groups and they are cheaper than new.

The Product Life Cycle

Show how to extend an item’s life cycle by rolling too-short sleeves or cuffs. When styling tricks no longer suffice, illustrate how clothing changes value throughout its life cycle with a trip to Goodwill or Salvation Army. Donate what can’t fit or be life-cycle-extended and after donating, don’t just drive off—go inside. Studying the prices of used clothing offers a chance to discuss depreciation and how supply and demand affect prices, says Balconi. And it also offers a chance to buy to stretch the budget.

Talk Tech

Today’s coursework can require smartphones for checking online homework assignments, calculators for math and computers that seem to need an upgrade every year. If you are among the nearly 40 percent of parents who intend to buy their children technology products this year, discuss the impact of opportunity cost. According to the Rubicon Project survey, tech is taking a larger share of budgets: Elementary and secondary school parents expect to spend nearly $400 on technology products, compared to $278 on apparel. More laptops can mean fewer high-tops.

Laying Down the Law

Adding more programs, accessories or capabilities to equipment, or even packing too much for lunch can illustrate the law of diminishing returns. Explain how that professional camera or complete suite of programs isn’t a wise investment until students can extract real returns from them.

Economic Education, in Class and Out

According to the Council for Economic Education, students who have taken a class in personal finance are more likely to engage in financially responsible behaviors such as saving, budgeting and investing. The council also offers free resources to help parents support financial literacy in K-to-12 and older students. The website at provides instructions to help explain everything from scarcity to government statistics. “It’s never too early to start,” says Douglas Young, an executive at the council. “You can risk falling really behind.”