“Mom, I need a new pair of school sneakers” or “Dad, my school bag is old and I need a new one”. Do these requests sound familiar? If they do, then the new school term is most likely around the corner. In addition to the cash spent on new books, money for extra lessons and extra-curricular activities, you can end up spending a small fortune to send your children back to school at the start of each new school term. Here are some financial tips to guide you.
1. Before new school term begins
Prioritize. Your child’s shoes are worn out and his computer is a few years old. Which should you replace first? While logic suggests that you should replace the shoes first, most children may want a new computer. This is a great way to teach them about delayed gratification and needs versus wants. Be open and honest with your children about budgeting and spending. Help them to understand why frivolous spending can be disastrous.
Plan. Discuss what activities your children would like to do during the new school term so you can have a sense of the overall costs involved. In this way you will not be surprised when your daughter tells you she needs $200 for a pair of ballet shoes. Be sure to look at the size of your son’s school shirts from last term and buy a size bigger for the new term.
Prepare. Get your children in the habit of preparing a budget. This will help reduce the need for you and them to make impulse purchases. Budgeting will also teach them about money management which is not often taught in school.
2. During the new school term
Buy in bulk. With children in school, you will have to prepare a large amount of lunches and snacks. Buying in bulk is a great way of stretching your money during the new school term. While buying everything in bulk may not be a good idea, you can still get the savings from bulk buying by sharing the cost and the large items with family or friends.
Beware of BIG sales. While the back-to-school sales are very enticing, be sure to check out your favorite store after school starts to benefit from even bigger discounts on unmoved merchandise that could come in handy during the school year.
Be on top of your budget. Try to remain as disciplined as possible and follow the budget you started before school. Get your children involved by rewarding the child who spends the least every month. Teach them the value of sacrifice and the importance of cash flow.
3. After the new school term starts
Consider all costs. While you may focus on the direct cost of extra lessons per month, the indirect cost of travelling or gas, snack money and extra books can put a dent in your monthly salary. Consider and calculate these indirect costs and think of creative ways to reduce them (e.g. carpooling to extra lessons).
Create a checklist. Constantly keep a checklist of the financial activities that you engaged in during this term so you can make life a lot easier next term.
While the cost of a new school term could put a strain on your finances, with a little planning and budgeting, you can ease the burden on your wallet and save cash. Your children will also learn some valuable life lessons about money.
Congratulations parents! You get an A for your financial know-how!