Serendipity

“Dan?” I asked my son, “I’m curious about how you budget your money. I mean, how do you save for things you don’t have to buy on a daily basis?”

“Budgets just make sense to me,” he said, “they seem intuitive.”

An interesting answer because, while budgets also felt intuitive to me growing up, I don’t think that’s the norm. In fact I think for many people the impulse purchase feels more “intuitive.” If you think about it, that’s why product placement in stores is so very important. Most people are more likely to pick up a candy bar at the cash register than to walk up and down the aisles looking for it.

I pried a little deeper: “Intuitive is good,” I said, “But how do you make sure you have money for things like toothpaste – you know, things you don’t buy on a daily basis.”

His response? “Serendipity.”

After waiting for what he knew would be my frustrated response to his tongue-in-cheek humor, he continued more seriously, “Ok, here’s my real answer. Most of my allowance is spent on lunches and transportation. When I have a day off from school, that money is saved, so it goes toward things like shaving cream and stuff. Also, I’m a frugal spender and I know how to get free stuff: like the nurse at school hands out free deodorant and the dentist gives you toothpaste.”

I have to admire his resourcefulness. I'm not sure that most people, when creating a budget, think about “free stuff,” yet time and again we hear in the news about people who clipped coupons and saved hundreds or even thousands of dollars a year by doing so.

Because every teen is not an “intuitive budgeter” we need to think about how we teach our teens not only to budget, but to save on items as well.

Here are some of the things you can teach your teen:
• Wait until an item is on sale before purchasing it. Good times to look for sale items are on the weekends of national holidays (like Labor Day or Fourth of July) or after big holidays (like Christmas.)
• Most large stores publish a “circular” advertising their weekly specials. Look for the circular at the front of the store and read it through before shopping.
• Comparison shopping is important. The internet has made this easier than ever. Have your teen look up the price of an item on-line, then compare prices to items at other on-line stores.
• Teach your teen about “hidden costs.” For example, something may be cheaper on-line than in a store, but they need to take shipping and handling costs into account when purchasing on-line items.
• Check on-line for printable coupons. (Just Google “coupons” -- there’s a lot out there!)

By teaching our teens "saving skills" we also teach the "budgeting skills" that will be invaluable as they grow into young adulthood.

Please note that Julie Ross is being compensated by American Express for these blog posts and that any opinions expressed are entirely her own. Also, remember to take advantage of the upcoming “National Money Talk Night http://www.moneynighttalk.com on September 16, 2010!