August 30, 2016
A few months ago we told you about how to stay financially on track while enjoying your summer, and it’s hard to believe but it’s already time to purchase school supplies and send your kids back to the classroom. As adults, we all remember the excitement of new clothes and reconnecting with friends after the summer, mixed with the dread of sitting in class all day for yet another school year. As classrooms become more technical students not only need new clothes and notebooks, for school but sometimes even higher priced tech supplies. With back to school costs ever rising, we recommend parents of school-aged children prepare budgets ahead of time for those first days of classes.
For a family with multiple children, the cost of back-to-school shopping can cost over $600 a year according to The National Retail Federation. If your students attend private school, it could be even more! Planning a budget ahead of time to cope with school spending will ease the overall expenditure. Create a budget that is realistic for the number and ages of your children and include clothes, items on their supply lists and even those extra costs that schools seem to write home about in the first weeks of school.
We recommend using the 50/30/20 budget rule for your home and here is how we think about those back to school expenses:
50% is for necessary expense – this includes your home bills such as a mortgage, groceries, utilities and any tuition you pay today.
30% is for personal expense – this is where your back to school budget should be placed such as notebooks, calculators and new school clothes.
20% is for personal investment – this should include saving for college tuition, retirement and maybe the short-term savings for that new computer someone will need next year.
Back-to-school shopping is also a great way to teach children about handling money and how important it is to stay inside the family budget. Plan a family meeting to share this year’s budget allocation and discuss what items should be included. Once your children are old enough to search online, they can help choose the items they care about, price them into your budget and even find low-cost places to shop. When shopping for clothes, consider giving your teenage-aged children a prepaid debit card to purchase items but limit it to what’s on the card. This will teach them to evaluate how much they spend on items and to see how much specific brands cost.
No matter the budget you set for you and your family, keeping your children involved will keep you all in check and teach your children a valuable lesson. The back-to-school season is a $24 billion industry so setting a plan in advance will help you get the most for your money. If you start to notice your budget getting tight just evaluate where to cut into your 30% expense section such as eating out to give you more wiggle room. You can also start planning for next year now to be better prepared for the expense.