The Nordstrom Anniversary Sale (July 12 pre-sale) and Amazon Prime Days (July 15-16) are coming up, so I wanted to talk about this now in order to help set your child up for a great year and, more importantly, lifetime success.
Both of the sales are particularly fantastic as they discount upcoming season items instead of clearing out last season’s stuff.
When you start this practice of budgeting depends a lot on the age of your child. Kids as young as 4 or 5 can understand and enjoy this. Younger kids can certainly be introduced to the idea of budgeting and making choices, but they obviously won’t be able to do the math behind their full clothing and school supply budgets so keep it simple.
Once kids hit older elementary years (7–8) or middle school age (around 9–11) they are definitely capable of a managing a bigger budget with some guidance. You will need to give some defined parameters (discussed below) and “best” cost ranges plus check their math, however the basic value to dollars and quality verses quantity will all make sense to them.
Why Is This Worth Doing?
Obviously one key factor in being a well-functioning adult is being able to live comfortably which is very connected to budgeting and investing skills.
But remember a second key thing: understanding the basics of assembling a wardrobe (accentuating the positive, colors that enhance and fashion coordination) is a life skill of itself! It may sound a little vain and fluffy but realistically, it’s pretty hard to get that high paying job or lead people if you can’t look reasonably put together, right?!?
It does take a bit of extra effort yet when you consider some facts about life success and happiness it is completely worth it because budgeting helps kids:
- be more grateful and satisfied with what they have (which is one of the top factors in happiness!)
- avoid being entitled (to a seemingly endless supply of nice stuff) in their outlook which is very connected to resilience and work ethic – both of which are top factors in life success and happiness.
- be a high functioning adult that is smart with money, understands how to set up a budget in order to save, give and invest throughout their lifetime.
- avoid future life stress and conflict; ex. couples fight more about money than any other subject so save them drama by being comfortable with money and making good choices without being extreme in either their spending or saving.
- stay out of debt as an adult because they’ve spent years getting comfortable with budgeting and making choices in the “safe” environment of home instead of in the real world where a big, impulsive purchase can hurt them in payments/interest lost for many years.
Some Facts about U.S. Average Spending on Clothing*
- Most families spend around $30–$45 per month for each young child up to $52–$78 per month for each teen. The starting ranges reflect the range between low and high income families.
- Annual budgets, if you add the per month ranges, total between $360–$540 (for kids under 2) up to $624–$936 (for teens).
- Sports equipment boosts the spending up a lot—an average $671/year.
- *Sources cited at end.
How to Set Your Child’s Budget
Consider these factors first:
- Think through what you usually spend on kid’s clothing and school supplies—check actual records/receipts if possible.
- Split the annual budget up for them in at least Fall/Winter and Spring/Summer.
- Our usual ratio is 2/3 Fall/Winter and 1/3 Spring/Summer but adjust accordingly depending on climate and lifestyle.
- For younger kids, I’d suggest giving a small budget for 1–2 items they care about whether that’s a backpack and lunch pail, 1 winter coat or maybe the items needed for their favorite activity like soccer or ballet.
- Consider removing some key items from their budget; I am a stickler for quality when it comes to shoes and having 1 main winter coat, so I do not include these items in my kid’s budgets. Also, I’d suggest taking out underwear and PJ’s.
- Carefully sort through their existing clothes to know what still fits and is in good shape.
- Think through what you want them to buy ahead of time and provide them with guidelines like needing to buy 1 warm coat, 2 hoodies/sweaters, 7 shirts, 6 pants/jeans, 1 backpack, etc.
Next do the math
Use a spreadsheet or pen/paper to rough out what they should be given based on the above points. I’m not going to advise a particular figure for you since I can’t know what you want to budget to cover, past spending or your income.
I will tell you that my now teen started budgeting in 4th grade and she received $300 for Fall/Winter and $150 for Spring/Summer. We bought her 1 coat, 3 pairs of shoes, underwear and sporting equipment outside this budget. She’s now 17 and gets $500 for Fall/Winter and $200 for Spring/Summer.
How to Guide Your Child to Successful Budgeting and Wise Purchases
- Well before shopping, introduce them some key budgeting principles:
- Talk through quality verses quantity very clearly; explain that if they choose to buy only a few expensive items it means they have less options and will need to wear the same things a couple of times in a week. Also explain if they buy a lot of lower quality items then will tend to wear out quickly (including tees that pill and fade).
- Buying high/low meaning having a small amount of high quality items mixed in with mostly moderate to low cost/fashion items raises the overall standard of their wardrobe; “high” can be either designer or quality.
- Talk through the difference between “designer” name brand and quality; sometimes they’re hand in hand yet not always.
- Explain that people need more shirts/tees than bottoms and that layering and accessories are a great way to stretch a budget and change the look of tops/bottoms.
- Capsule Wardrobes and mixing/matching help stretch their budget and make it easier to get dressed in the morning; Pinterest has many examples of children’s capsules.
- Use websites to pre-shop and expose them to price ranges and differences in quality and style.
- Introduce cost cutting ideas like sale shopping, buying things on eBay or at consignment stores and thrift stores to save a ton on things that matter less to them. If they turn up their nose at second hand things, play “Thrift Shop” to remind them that even Macklemore does it. Isabelle has scored a number of mega bargains on lightweight jackets/hoodies on eBay—things like Nike windbreakers for $4 plus $4 shipping.
- Make the process very tangible by putting cash in an envelope and clip a pen to it so kids can track their spending as well as have a clear visual on what’s left; simply remove cash for any online purchases.
- Be sure to have them save all receipts in their cash envelope in case they change their mind or if there’s any quality issues.
Enjoy the process and relax your standards a bit (it’s hard—I know first hand!). Yet the results of my teen making her own choices with sound criteria as so worth the time and energy it took to teach her this valuable lesson. I’m excited to start this tradition with Reina this year!
All Photos by Nicole Vaughn