Avoid These Back to School Debt MistakesJul 05, 2018
Too early to be thinking about back to school already? Think again. Although it may seem a little early to be thinking about your kids heading back to class, it’s not a bad idea to start planning for the big return. With many Canadian families feeling the financial strain of the increased cost of living of the GTA, those back-to-school expenses could lead to greater financial stress and deeper debt.
However, as September approaches, here are four tips to keep in mind to help you avoid back-to-school debt mistakes and help you manage to stay on top of your finances:
- Not having a back-to-school budget
Creating a back-to-school budget should be your first step when preparing to send your children back to class. When creating your budget, it’s best to think in terms of ‘nice to have’ and ‘need to have’ to determine which expense to include and which to hold off on for now. Also, knowing what you need to buy ahead of time will help you stick to your budget. Go through the stuff you already have at home; leftover books, pens and pencils, and only write down the items you need. Creating a list, and sticking to it, will really help you stay on budget and not buy those ‘nice to have’ items you think you need.
- Stocking up on everything all at once
The advantage of starting your back-to-school shopping early is that it will allow you to spread the purchases over a few months. Look for deals and sales throughout the summer. Check-off your back-to-school shopping list as you go, to help avoid having one large expense in the fall, following summer vacation. Getting a head start, or shopping throughout the year instead of all at once, will also ensure that you don’t spend more than you should and add more to your debt load.
- Not looking for ways to save
Just as stocking up on everything at once can cost you in the long run, missing out on ways to save money is also a mistake that could lead to more household debt for you and your family could have avoided. Shop second-hand for clothes and high-tech items. Shopping online and comparing prices is also a great way to save and find the best deals for things. Take some time to compare prices and look for the best deals to help you stick to you budget.
- Not involving your children
Finally, planning financially for back to school is a great learning opportunity for your child. Involve them in the planning stages by asking them to create their own back-to-school wish list and then working with them to divide this list into needs and wants. Also, having your child save all or part of their allowance to put towards new clothes or shoes for school is another great way to involve your kids and teach them the importance of saving, avoiding overspending and sticking to your budget.
Older children will also benefit from being involved in the process of creating and using a budget in order to manage and track spending, a skill that will come in quite handy when they are older.