I don’t know about you, but, when I was a kid, I remember getting a short list of the school supplies I needed on the first day of school.
I came home and my father and I immediately went to the local stationery store in search of notebooks and pencils.
Fast forward to this past summer when I received an email from my son’s school with what seemed to be a never-ending list that included everything from 24-sharpened pencils to a deck of cards.
A deck of cards?
Back-to-school shopping has certainly taken on a life of its own and as a result is considered to be one of the busiest times of the year for retailers, just behind the holiday season.
According to the National Retail Federation’s Back-to-School survey, families will spend an average of $634.78 on apparel, shoes, supplies and electronics.
That’s down from nearly $689 a year ago.
Let’s take back-to-school shopping and use it as an opportunity to teach our kids about how such activity is shaped by and also affects our economy.
Here are three tips on talking to your kids about consumer spending.
1. Yes, you’re contributing to the economy. Kids might not realize it, but consumer spending accounts for more than two-thirds of economic activity in the United States. And, each dollar they spend is part of that. In fact, when exploring retailers, investors will often look at something called Same Store Sales. Retailers and restaurants that have been open for at least one year will report these numbers on a monthly and quarterly basis. These results show percent changes in the amount of money they are making. During back-to-school, retailers which cater to kids are often under the microscope. Basically, if our kids don’t think what the company sells is cool, that retailer could have a problem.
2. I know you really want it, but… Of course every kid wants to go back to school wearing what’s “in.” However, there must be a lesson taught of wants versus needs. Help kids set a budget not only for back-to-school items, but for all purchases they make and they will quickly realize what they need and what’s nice to have. An interesting finding in Capital One’s Annual Back-to-School survey shows that 21 percent of teens say cell phones, smart phones and other electronic gadgets are “must have” items. Compare that with only 4 percent of parents saying those items are top priority.
3. Why not think like an investor? I mentioned earlier that investors look closely at retailers to get a sense of not only which ones are doing well but also if consumers are spending money; which is a plus for the economy. It could be a fun exercise to take a clothing store or other retailer your child likes and follow how well it’s doing. Is it making money or are there certain issues causing investors to back away? A simple Google search can get you started.
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