“When it comes to budgeting, the earlier you can start the better.”
Carletta Clark, community manager at Chase Indianapolis, said people can think of budgeting as a way of saying yes to themselves, instead of saying no. Back-to-school shopping can be a great time for families to introduce budgeting.
“Although it’s never too early, it’s really never too late. If parents haven’t done it before, they can start right away,” Clark said. “The next best time is today if they didn’t do it yesterday.”
Clark started budgeting with her son when he was just three years old. By setting aside three dollars for him to spend during their trips to the grocery store, she taught him what was and was not in his budget. She encourages parents to talk openly about budgeting as soon as possible and let kids know they are a part of the budget.
Parents can start by giving kids options and telling them what amount they have to spend and letting them monitor how they spend the money.
“It always goes back to options and letting them be a part of the process,” Clark said.
Planning ahead is key — especially for expenses like back-to-school shopping that come around every year which she said parents should be thinking about year-round, not just at school time.
According to Clark, there are three key steps to start using a budget: 1) introducing the budget, 2) laying the groundwork for saving and earning, and 3) using the right tools like Zelle or a budget binder.
Setting up S.M.A.R.T. goals — which are specific, measurable, achievable, relevant and timely — can help parents teach their children how to use their money.
“Having a plan for how they are going to spend money, that’s really saying ‘yes’ to them,” Clark said. “It’s not saying ‘no’ to them.”
Parents can avoid overspending by sticking to their plan, taking advantage of sales and focusing on needs instead of wants, Clark said. Parents can even ask the teacher to specify which supplies are needed to start off the school year and make those purchases first.
When it comes to banking, there are different types of accounts available based on your usage. Families can begin setting up a first banking account for their children, then transition to high school and college accounts.
“Whatever your usage is, make sure that you’re in the right account,” Clark said.
People can visit their local bank and talk about how they plan to use the account and learn which account is best for them.
Helping college-aged students with budgeting comes with its own set of challenges.
“I think for a lot of parents it’s a rude awakening when they realize they haven’t talked about budgeting,” Clark said. “They haven’t talked about laying the groundwork for savings early, and they haven’t talked about using the right tools. It’s more imperative to do it quickly then.”
But when college students ask for money, this can be an opportunity to bring up a budget.
“People are afraid of budgets, but budgets really show what’s coming in, all your income, and what’s going out, all your expenses,” Clark said. “A budget tells you what you can do.”
Even when you are using credit cards, Clark said you can still have planned spending. College students can start making decisions with their spending like using credit for something that helps you grow, like a class that you need to take.
Using mobile apps, such as the Chase mobile app, can help track spending.
“Our goal for our kids should be to help them be a money manager where they’re managing their money and not just spending money,” Clark said.
For more information on banking and budgeting, visit www.chase.com/personal/financial-goals/life-moments or www.chase.com/studentbanking.
