Essential Back-to-School Budgeting Tips for Families
August 16, 2016 : Allie Freeland – Contributing Editor
Editor’s Note: For more tips on education on budgeting and financial literacy, check out Dollars & Sense, an H&R Block initiative set to increase the financial education of American teens.
Put away those bathing suits, flip flops, and beach towels. It’s back to school time!
Whether you are ready or not, you must be prepared for the upcoming school year. And this doesn’t just happen overnight. Starting a new school year requires preparation…and a budget. In fact, the 2015 National Retail Federation (NRF) Back-to-School Spending Survey revealed the average family with K-12 children spends $630.36 on school supplies and needs per year, up 42% in the past decade.
You may wonder, is there a way to budget for back-to-school expenses? In short, yes! And, you should involve the whole family. Now is the perfect time to speak with your kids about budgeting and saving. This conversation can be tricky, but is essential.
Here are six simple strategies to teach your kids about successfully planning for back-to-school expenses and saving money during the school year:
1 – Set a back-to-school budget amount.
Divide it evenly between the members of your family. Then, use a white board to keep track of your spending. Color code your spending by category, like: electronics, books, entertainment, food, housing, and miscellaneous items.
2 – Put your kids’ technology obsession to use.
Download money-saving mobile apps for shopping. When back-to-school shopping, apps allow you to cut through the clutter to make sure you are getting best price possible for your items.
3 – Get your kids a prepaid credit card for back-to-school shopping.
This is a good way to test the waters before giving them a real credit or debit card. “Before getting them their first debit or credit card, let them practice with a prepaid card to learn that when your money is gone, it’s gone,” notes Kristi Story of The Budget Diet.
4 – As a family, research the cost of items on your shopping list.
This offers an important lesson about “value” versus “cost” and can help teach bargain hunting.
5 – Have your kids visualize something they would like to spend their savings on.
Think: a car, special toy or tech gadget. Each time they spend money, they will be reminded of their aspirational goal and might avoid unnecessary purchases. “Just as practice prepares teams to win, goal-setting in personal finance creates daily habits that lead to cash victories,” remarks Kevin Voigt of NerdWallet.
6 – Make sure your kids understand “needs” versus “wants”.
This is a lifelong strategy for financial fitness. Ask them “Is this something you can’t live without this school year, or do you just think it’s cool?”
Tackling back-to-school shopping with a strategy sets the whole family up with good budgeting habits for the future.