Back to School Budgeting Tips
Backpack, check. School supplies, check. New clothes, check. Back to school shopping can get expensive. And that’s just the tip of expenses when it comes to school. Throughout the year, there are several opportunities to spend - and save - money, no matter the grade. Read on for what you need to know about school budgeting, finances and more.
Plan out back-to-school shopping: The best time to shop for back-to-school clothes is actually when it’s not the back-to-school season. That means waiting a few weeks (or months) for the back-to-school rush to die down. If your kids don’t need a whole new wardrobe, waiting a little while can save you a lot of money. If you can’t wait, sign up for store emails to get money-saving coupons. Just be sure to unsubscribe after shopping so you’re not tempted by the sales when you don’t need anything. Also, whether it’s clothes or supplies, leave the kids at home. That way you’ll make decisions based on your budget and not on the latest-and-greatest apparel and brand names.
Prepare for school fees: Tuition and fees for the school year add up, whether your child is in kindergarten or university. Make sure these expenses are tracked in a budget so there are no surprises. Instead of paying all the expenses up front, see which ones can be spread out. For instance, lunchroom fees can often be paid on a monthly schedule instead of a lump sum at the beginning of the year. This is especially important with the uncertainty of schools remaining open and waiting for money to be reimbursed. Unless the money is making interest, try not to have it leave your account until it absolutely needs to.
Max out your benefits: The Canada Child Benefit (CCB) is increasing for the 2020/2021 benefit year to keep pace with the cost of living. While it can be easy to have your monthly CCB go straight into your account, consider keeping it separate if at all possible to designate it for your child’s expenses. To maximise this benefit, you can put it into a Registered Education Savings Plan (RESP) account where the money will be matched from the Canada Education Savings Grant (CESG) from the Government of Canada. It adds 20% to the first $2,500 in contributions made into an RESP.
Those with kids attending post-secondary school should be aware of the rules when withdrawing from an RESP. Withdrawals, qualifying as educational assistance payments, are taxable to the student. For additional savings, look into provincial and national grants and scholarships that your child may be eligible for to offset tuition fees.
If you’re now an empty nester, consider investing in your financial future as your day-to-day expenses are likely to go down. This is the perfect time to focus on yourself and your retirement.
Teach your kids about money: The back to school season is a great time to teach kids - and remind yourself - about money management. Over the summer, budgets tend to slide, and the start of a school year is an opportunity to get things back on track. Revisit your budget as a family, accounting for any new expenses (think school supplies, clothing and extracurricular activities). Plan ahead for birthdays and holidays, allocating money for them and responsibilities for who’s spending what.
Don’t forget your emergency fund: While revisiting your budget, make sure to allocate money for your emergency fund if you can. While other expenses do build up, it’s important to add even a little bit every month, as emergencies can unexpectedly derail plans and be quite costly. Build this into your budget and have it auto-transfer to a separate savings account - set it and forget it.
With a bit of planning and smart decisions, your money can go a lot further with these back to school money tips. How do you prepare for back to school expenses? Share in the comments below.