August 10, 2022
Categories: Checking Accounts, community, Credit Cards, Debit Card, Education, Financial Planning, Financial Wellness, In the Community, Protecting Your Accounts, Safety & Security, Savings Accounts
By GreenPath Financial Wellness
Rising prices and increasing interest rates are putting the squeeze on family budgets as the school year ramps up.
A recent back-to-school survey shows that parents plan to spend an average of $661 per child for back-to-school shopping this year, up 8% from 2021 and 27% from 2019. Clothing and accessories lead the increase, costing 18% more this year on average. School supplies cost 7% more.
Inflation weighs on the minds and wallets of many back-to-school shoppers, the survey said. Over half (57%) of K-12 parents surveyed expressed concern about price hikes for back-to-school products.
Even if your kids are back in school already, there’s still pressure to stock up on supplies, clothes, devices, and extracurricular gear.
The good news is that with a little planning, families can successfully manage school expenses with the following ideas.
- Consider your spending plan
Rising inflation and interest rates have changed household finances, further compounded if there has been an unexpected loss or change in monthly income. GreenPath’s budgeting worksheet is a great way to get a handle on tracking income against expenses. Once you have a good handle on your current financial state, determine how much you truly feel comfortable spending.
- Make a shopping list that reflects the difference between “wants” and “needs”
Prioritize your needs list. What do you need to buy before school starts and what can you purchase later? Take inventory of what you already have on hand like backpacks, clothing, and school supplies. Can anything be reused or repurposed? Check the stability of your high-speed internet. Is the family computer able to support your student’s homework assignments? Are you up to date with the latest technology? If new clothes are a need, watch for sales or online stores offering the most competitive pricing.
- Make it a family affair
Bring the kids shopping with you and share the list with them beforehand for their input. Better yet, have them help you create it. If they want something that isn’t in the budget, offer them the option to chip in their own money.
- Be mindful of impulse buying
Trendy items like the “latest and greatest” technology or fashions featuring popular cartoon characters tempt us when we’re shopping in the store or online. Purchasing an item that was not planned for ahead of time is an impulse buy. As noted in the tip above, making a “needs” list can help you avoid those impulse purchases. With a plan in place, you’ll be less likely to give in to overspending. Another way to curb impulse buying is to wait a day so everyone can have a cool head and a fresh perspective. When the temptation isn’t staring you or your kids right in the face at the check-out line, ask them later if they will actually use the item. Being more intentional about impulse purchases plays a critical role in forming a healthy attitude about money and sets kids up for long-term success.
- Watch those credit card balances
If you use a credit card, keep a close watch on the balances. Interest rate increases will take a bigger bite out of your payment each month. As the cost of credit increases, track your balances weekly. This can be a simple process of assembling printed receipts in an envelope after each shopping outing or regularly reviewing your account history online. This can help you have a clear picture of the credit card balances as they are incurred.
- Look at the whole picture
Back-to-school expenses are only part of your financial picture. Families looking for additional support to address finances before hitting the stores this fall have options.
Our partner GreenPath provides caring Financial Wellness Experts to assist in assessing your financial situation and creating a personalized plan to achieve your goals.
GreenPath works with thousands of people each month to pay off debt, improve credit and lead a financially healthy life. It all starts with a conversation for you to create an action plan to work toward your specific goals.
This article is shared by our partners at GreenPath Financial Wellness, a trusted national non-profit.