Rachel Cruze Emphasizes Importance Of Kids' Involvement In Budgeting

Kids are back in school, and for this time of year, parents are holding off on buying things because of the cost. Personal finance expert and nationally recognized speaker and author Rachel Cruze joined Dave Davis with some back-to-school budgeting ideas.

Dave: You know, back to school, it may be fun for the kids, but it can be really stressful for parents financially. Is that what you see with your listeners?

Cruze: Oh, absolutely. I have three kids of my own, and we had our back back-to-school night last night. You go, and you start buying everything for the first day of school, and it's expensive. I mean, inflation is the real deal. It's not just our groceries and gas. We're feeling it and back-to-school shopping as well.

Dave: So, let's start off with your three-point plan because I love this, and it sounds simple, but let's just start with creating a budget. How do we do that?

Cruze: Yes, so a budget kind of gets a bad rap, but it's really just a plan for your money. So figure out, OK, here's how much money we have to spend without going into debt for school. That could be school supplies, back-to-school clothes, shoes, anything in that category, and have that amount of money, and then list out everything you need to buy. The goal here is to spend what you planned for. And by having your numbers visual, it's really important. So if you go to everydollar.com/rachel you can actually create a free budget there. And I would really encourage you to do that, because when you have a plan going into something like school supply shopping, it is key that you're intentional and you're not just showing up at the store and just grabbing whatever you see.

Dave: Right and know where to buy and what to buy. Again, you have three kids, you have this experience. This is something that you have learned.

Cruze: Yes, and it really depends on the store. I mean, just like our groceries, you know, different grocery stores are going to be more expensive than others, so go buy your basics at places like Dollar General or the Dollar Tree. And then maybe if there's some fun things you want to get at Walmart or Target, you can do that. Even within the store there's usually some great sales going on there. And so knowing and understanding, OK, what stores we can go to and should go to and within the store where to buy, you can also go online and do some cost comparisons there, which is really wise too.

Dave: This is so important. The third point about making it a family experience because we're trying to teach habits, right?

Cruze: That's exactly right. Teaching your kids about money, I think, is best done when it's in the ebb and flow of life, and back back-to-school shopping is something they're going to be very invested in. I know it's a memory I had growing up, probably like you, and I think this is a perfect time to teach your kids about money. Now, this is a little inconvenient, but if you can go to the bank and even cash out the amount of money you plan on spending, take that with you and then talk to them. I mean, the pencil aisle, different pencils are going to cost different price points, so show them and talk to them about that, and have them help you stay within the budget too, because it kind of gives them a little bit of purchasing power, which I like. But again, this is a fun time, fun time for kids, but you can also make it a teaching opportunity.

Dave: And the kids in the brainstorming process, this is cool too because they get to see the budget.

Cruze: Yes, and I think it's really important for them to understand that money has limits. Money, you know, has boundaries to that. And when they can start to learn. OK, I can buy a cheaper pencil set here, which means I can get the great binder over there, making these decisions or skills that we use even as adults today. So when you can do that with your kids, it makes teaching them about money really fun and enjoyable and interactive.

Dave: Any words for parents who may be OK, it's like, I haven't budgeted. It's kind of crunchtime now, and they're really feeling the crunch. Like, do I have time to do this? Can I do this?

Cruze: Yes, I know this stuff sneaks up on us. Well, I would say, go ahead and look at your budget for August, and depending on when the kids go back to school will determine when you go shopping. But you may even look at your budget for the first time, maybe you've never created a budget, and realize, Oh my gosh, we go out to eat a lot. We could probably cut back a little bit there. Here's two subscriptions we never use. Let's cancel those. And it's amazing, these little tweaks that you can do, you can find a few hundred bucks, usually per month, by just being intentional with your money. You know, there's so many things we can't control in our world today, housing prices and inflation, but what you can control is when your income hits your account, what you do with it, and that's so, so important. It's empowering to know you have some level of control over your life and your money.