As back to school is upon both children and parents of all ages, we wanted to address a few tips for saving and budgeting whether you are dropping at kindergarten for the first time or all of a sudden find you are now living in the empty nest.
- Inventory their needs. Regardless of your current life stage sending kids back to school comes at a cost. School supplies, clothing, extra curriculars, athletics and furnishing that freshman dorm room all have a price tag. And for those newly found empty nesters assuming tuition, room and board have been paid for or financed, your college aged student’s living expenses. Are you providing an allowance, is your child hunting for a job? Regardless of your family’s choice it is essential you account for the extras.
- Create a budget. Once your back-to-school list is complete and inventoried, just like your household operating expenses, set a spending limit and do your best to stick to it. Shopping for anything without a budget creates the pitfall of overspending.
- Pad your budget and create a reserve. Any expenditures in life can and likely will go over budget. Similar to your household’s emergency reserve or rainy-day fund be sure to add a little extra to the bottom line for the unforeseen.
- Get ahead of it. Perhaps this post is a bit late in the game for the coming year, but it is never too early to begin thinking about next. This can be difficult as we take our last family vacation of the summer and find ourselves in spending not savings mode. As little as $25-50 a month set aside for parents of younger children will set you up for success the following year. For the college aged student this becomes a much bigger line item and requires additional advanced planning.
- Include them in the process. Start by revisiting our last Kids Corner post which can be found here. Back to school shopping or sending an older child off to live on their own for the first time is a great opportunity to encourage saving. And one that will help them to understand what things cost, when and where to take advantage of sales and discounts and probably the most important… what they can live without.
We hope this helps both you and them and more importantly that they stay safe as we are all seeing a surge in COVID-19 cases. As always, we are here to help at every step along the way, from back-to-school to kick-starting that first college fund. Just like your retirement our experienced financial planners can help you to budget for this too!
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