You may think of sending your children back to school not a big deal: a few pencils, some notebooks, and a new pair of sneakers should do the trick. Unfortunately, this is not the truth. Preparing a child for another year in school encompasses many, many necessities, and constitutes a major part of your personal finances. If you were already able to get your child all of the school materials and back-to-school clothes that he/she needs, but are just now getting around to the details, you have a chance to cover all of these without neglecting your other, everyday personal finances.
The key to making this work is devising a sound and realistic budget within the boundaries of your finances. Make a list of everything left to pay for: physical exams, clothes, athletic and academic fees, uniform or instrument rentals, haircuts, and add them all up to give you an idea of what your personal finances are up against. After you have made your list, sit down with your children and distinguish dire necessities from the things you can wait on. If your child insists on having a designer purse, tell her she can earn it herself, or at least pay for half of it. This will either stop your child from wanting whatever the frivolous item is or encourage him or her to start helping out around the house. This is also a great way to introduce your child to the wonderful world of personal finances and budgeting (it will probably be much later before he or she thanks you for it).
You can also cut costs through traditional sale hunting. Visit more than one store and do some price comparing before you settle on a $80 pair of running shoes for a child who is growing at such a rate that he will probably only wear them for six months or so. Discount grocery stores, drug stores and places like Wal-Mart, if you can stand the madness, are great places to find affordable school supplies. If you still have shopping to do, take this into account.
If you think getting your kid through grade school is tough, just wait until it’s time for him or her to go to college. If you haven’t thought about this, now is the time to start saving. Mutual funds are a good option for parents whose children are still young, since these funds provide long-term growth. For those whose kids are a lot closer to their freshman year, consider a risk-free certificate of deposit, money market fund or a traditional savings account. The 529 College Savings Plan is a revision in the tax code that helps parents pay for college. This plan is considered an add-on product and is part of your overall personal finances. Therefore, set aside a fixed amount each month, but pay your regular bills first. Remember that the 529 Plan is not a prepaid tuition plan that locks in tomorrow's tuition at today's prices. Check with a tax advisor as to the other implications and limitations of this plan. Applying for financial aid is another more practical alternative that is easy to do and can yield many funding possibilities.
The great thing about sending your child off to college is that although you are still responsible for his or her education, you can now put off all that dreaded back-to-school shopping on them if they are working (which they should be). A part time job waiting tables or doing a work study program and opening a college checking account is an excellent way to send your child off to adulthood and still be there when they need textbooks.
By Kelley Caner