Ideally, this would mean that when shopping, as your child reaches for an expensive item -- say, a pair of pants -- you could point out a less expensive pair of pants and remind your child that if there is enough money left over, it can be used to purchase the designer jacket he wants. Eventually, your child will reach for the less expensive items himself, planning for the items on which he would rather splurge.

Of course, this means you actually have to follow through on your word -- and the reward.

"No budget process ever works without a reward," says Sander. "And it does work. Already (my younger son) will look at two candy bars and say, 'This one is $1 and this one is 69 cents,' and he'll get the cheaper one."

3. De-program before the trip
How will you get your child the name-brand items he wants while staying under budget? You won't. Sander says that to avoid having your child fall into a I-can't-possibly-wear-this-if-it-isn't-Nike meltdown at the store, you need to de-program him from commercials.

"We teach our kids the 'disvalue' of brands. We point out commercials and say, 'They are trying to get you to buy that. You can either buy it or think for yourself,'" he says.

Sander also recommends buying your child one luxury item per year.

"We get my son one fancy pair of shoes a year. When those shoes wear out, he gets the cheap ones. And he understands that," says Sander.

4. Buy more than books
Your child's school should send you a list of what you need to purchase. Don't be surprised if it's quite a bit more than you remember buying in your school days.

"The schools put a lot more of the burden on the parents," says Sander. "I've seen some pretty long lists -- drinking cups, all manner of art supplies. We once had '500 sheets of different-colored construction paper' on a list. And then once they get to high school, computers become an issue."

Victoria Jacobson, president of The Foundation for Credit Education, agrees.

"Gone are the days when school supplies consisted of a three-ring binder, notebook paper and pencils. The academic and extracurricular demands on students today often involve such costly items as personal computers, high-tech calculators, PDAs and uniforms," says Jacobson.

She recommends taking inventory of what's in the house and recycling last year's school supplies before shopping.

"While your kids might cringe at the idea of 'hand-me-downs,' they may be far more receptive to the concept of 'recycling' school supplies and clothing as a way to contribute to the family's financial environment and save money toward other wants and needs," says Jacobson.