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“I have to teach my teenager how to spend money,” said no parent, ever.
While no one has to show a teen how to shop ‘til they drop, being mindful about how to shop is an art that doesn’t come naturally.
Kids should learn early to resist impulse buying in order to consider multiple options and get the best bang for their buck.
The Center for Financial Empowerment, the nonprofit organization founded by SCE FCU, teaches the art of comparison shopping in its Financial Capability Program for high schools. With the biggest shopping season of the year right around the corner, it’s the perfect time to emphasize this skill with your teen.
Comparison Shopping is “planned buying,” and includes a careful consideration of a product’s features, price, and quality. Taking the time to comparison shop may help you save money on a product or service, or to buy a better quality product for a reasonable price.
Think through exactly what's needed before shopping
Ask the following questions to determine what’s needed:
Determine the level of quality between the products being compared
Product quality depends on the materials used, craftsmanship and durability. Find out how it’s made, what materials are used, and how it’s packaged. Sometimes this information is on the packaging, or you may be able read reviews, and/or ask questions of other people who own the product.
Consider the TOTAL cost of owning the item
Some products have additional costs other than the purchase price. These extra costs need to be considered to prevent overspending. For example, clothing that needs to be dry cleaned will cost more over its lifetime than clothing that can be washed at home. Or electronic devices that require additional fee-based services to operate will cost much more than the initial purchase price.
Think about how the item will be used
Knowing how you’ll use the product will help you look for a product that has the features most important to you. For example, an expensive product that has a few of the features you want and a list of extra features you don’t care about may not be worth the high cost.
Consider the “opportunity cost”
The opportunity cost is what you give up in order to get something else. If you spend your weekly earnings on a new pair of shoes, you may have to say no to a ski trip with your friends.
Making informed spending choices can help teens and young adults spend wisely and build strong financial habits that will carry into adulthood.
Help us empower the next generation for financial success!
The Center for Financial Empowerment is a 501c3 nonprofit organization whose mission is to empower disadvantaged youth through financial literacy education. Find out more about our work at Center4FE.org
Comparison Shopping Splendor, Take Charge Today, January 2007