Smart Saving Strategies: Preparing Your Finances for Back-to-School Season

While it might seem that summer has just started, back-to-school season is almost upon us. Sending your kids back to school comes with a cost, whether they will be attending elementary school, high school or college. Before embarking on back-to-school shopping it is important to take the time to prepare a “shopping list” and more importantly to set a budget.

Much More Than Books

Over time, computers and computer supplies have become among the most expensive back-to- school items. With the trend towards the use of technology it is not surprising that this has become one of the top back-to-school expenses for most students.

Textbooks, new clothes, fees for school-related activities also represent significant back-to-school expenses for many families. For families with students who are off to college, they will need to budget for the costs of transportation to and from college, living expenses either on or off campus as well as the costs of tuition and fees.

Set a Budget??

Setting a back-to-school spending budget is important for two reasons. First, it helps parents ensure that they include everything that their child needs for the upcoming school year. While as parents we are always susceptible to the whims and wants of our children, laying out a shopping list helps ensure that the important items are covered. You can then decide on a case-by-case basis for the ad hoc requests your kids might make.

The second and equally important reason to prepare a back-to-school budget is to get a handle on how much this will cost. This is especially critical if you are shopping for multiple children. Knowing what you will need to spend can help you adjust your budget on other areas for a month or so if needed.

Look for Discounts

Preparing a list upfront can also help you in your efforts to find the items you need at the best price. Online shopping is a good vehicle for your back-to-school shopping. You can shop for what you want and compare prices. Especially on the higher ticket items, it is likely you will find a wide range of pricing.

In some cases, there may be several options beyond one particular brand for items on your list. This might be the case with technology items such as a laptop or a tablet. Within any specifications supplied by the school, prices on these types of items can vary widely. Do your homework and look at the specifications, if any, supplied by the school for these items.

Look for Summer Sales and State Tax Holidays

Many major retailers offer summer sales for back-to-school shopping, both in store and online. These include the likes of Walmart, Amazon, Target and Best Buy. Be sure to watch for these and other sales to do as much of your shopping as possible.

About a dozen states offer a state sales tax “holiday” over the summer to help parents save on their back-to-school shopping. Check to see if this applies to your state and if so, how the rules pertaining to this sales tax break work.

Involve Your Children

As early as you feel is reasonable, try to involve your children in the process. Especially as your children reach middle school and high school age, they should be heavily involved in the process of building the list and shopping for the best prices on certain items. Involving them at these ages can help them understand the cost of things and the importance of budgeting.

Once your children reach college age, it might be that you ask them to prepare the list and the budget and then tell them how much you are able to contribute to these costs. Let them take charge of the process and then be there as parents to help as needed.

Involving your children in the back-to-school shopping process at an early age is an excellent way to teach them about budgeting and the cost of things. It is not that you want to deprive them of anything for school, but rather this is an important life lesson for them. The earlier they learn about how much things cost and that a “dollar” only goes so far, the better they will understand these important principles as they move into adulthood. Teaching your children about money is perhaps the most important lesson you can teach them to support a successful life as an adult.

Contact your Wedbush financial advisor for tips on teaching your child about money and about saving for your child’s college educational expenses.

Disclosure

Wedbush Securities does not provide tax or legal advice. Please consult your tax or legal advisor.

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