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How to Avoid Back to School Debt

Pencils, binders, new clothes, shoes  – the cost of preparing for back to school can really add up! In fact, many parents admit that heading back to school definitely puts a heavy strain on family finances. It can even lead to adding more to the household debt load – bad news for families that are working diligently to reduce the debt they owe.

Although it may seem early to start thinking about school supply shopping, having a plan in place is the best way to prepare for the added costs of back to school.

Starting early will also reduce the chance you’ll need to rely on credit cards to cover your purchases. High-interest credit cards are one of the most expensive forms of debt. Paying for your back-to-school expenses over time on a credit card will not only add to your debt load, the interest charges will add to the cost of your purchases.

Here’s your three-step plan to prepare for back to school the smart way:

Step 1: save now

Even though the summer season has only just begun, it’s a good time to start thinking ahead and planning for school expenses. Start by creating a back-to-school budget. Use this budget to help you estimate how much you’ll likely need to spend in order to get your kids geared up for classes. Once you have a rough estimate of what you’ll need to spend, start putting money away each week during the summer for school supplies.

If you find it’s hard to find that extra savings, try looking for ways you can cut back your spending this summer. Scaling down your family vacation or opting for a staycation instead, for example, can save you quite a bit of cash – cash that can be used to pay upfront for school expenses instead of relying on credit cards.

Step 2: find ways to be frugal

Cutting back on summer spending is not the only way to avoid back-to-school debt. It’s also important to make sure you’re spending wisely. One way to save some money is to consider shopping second-hand at a consignment store or gently used clothing store for your kids’ fall and winter clothes. Many of these stores have a great selection and the clothes are often new (or as good as new).

If second-hand stores aren’t for you, there are also many ways to shop new and save. Consider spreading out your purchases over the next few months. Chances are, some classroom and clothing purchases can wait until a good sale comes along.

Also, a simple search online of personal finance writers and mommy bloggers will uncover endless ways to be back-to-school frugal.

Personal finance writer Kerry Taylor has a ton of great ideas for saving money as the little and big kids head back to classes. Check out her blog here.

Step 3: plan ahead

Finally, once September rolls around and all the shopping madness has subsided, your final step should be to create a spending plan for the next school year that will allow you to avoid debt.

Tally up how much you think you’ll spend next year based on this year’s expenses – an estimated amount will work. Then divide that amount by 12 so you know how much money to put aside each month in a back-to-school savings account.

By planning so far in advance, you’ll not only be really prepared for the extra financial strain of back to school, you’ll also be able to take advantage of clearance sales and savings that happen throughout the year on those items you know your kids will need.

How do you plan to shop for back-to-school without adding to your debt load? Join the conversation and share your tips and tricks using the hashtags #BacktoSchool, #DebtSolutions and #FamilyFinances.

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