Be Money Smart this School Year

Back-to-school shopping is expected to hit a record high average this year whether consumers are doing the shopping for children headed back to grade school or for older kids going off to college. Clothes, shoes, bookbags, art supplies, electronics, dorm room essentials (and non-essentials) can all add up pretty fast.

A National Retail Federation study estimates combined spending for families with kids from Kindergarten to college will reach a whopping $80.7 million this year alone.¹ That’s on average $696.70 for families with kids under 18 and $976.78 for families with college students.¹

Those are some overwhelming averages when you consider that more than half of parents with kids under the age of 18 (and 42 percent of parents with college-bound kids) say they feel pressured to overspend when it comes to back-to-school shopping.²

Here are some ways to keep spending under control:

• Rethink the money lessons you’re imparting. Our intentions might be in the right place when we send our youngsters back to school with all the best stuff, but it can also pay off to set some spending ground rules and consider what lessons they may be learning from the experience. Provide them with what they need, and maybe splurge on a trendy non-essential or two to ramp up the excitement of a new year, but don’t take your kids on a spending spree – especially if you’ll go into debt doing so! Remember, they are watching you and taking mental notes.
• Set a budget and involve your child. Set a back-to-school budget, share it with your child, and then buy items on their list based on that number. When it comes to school supplies, you can involve an older child in the process by telling them they have “[X] amount of money to spend on their school supply list.” Let them take the entire activity over by locating the items on the list on the Internet and saving them in an online shopping cart. You can compare the cart to their list before checkout.
• Don’t go into debt. Don’t put back-to-school supplies or shopping items on a credit card unless you can turn around and pay it off right away. If it’s the credit card reward points you’ll receive, then earn the bonus, but pay off the bill immediately. While most Americans say they wouldn’t purchase something they couldn’t afford with a credit card in order to look successful to others, a quarter still say they would take on the debt.²

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1 NRF.com, “Record Spending Expected for School and College Supplies,” July 15, 2019
2 Bankrate.com, “43% of Parents Pressured to Overspend on Back-to-School Shopping,” July 29, 2019