Getting Smart About Back-to-School Spending

It is the time of the year for celebrations and soon, a brand new school year will begin. This is a crucial time where parents concern themselves with their children’s back-to-school supplies, particularly when children and teenagers tend to outgrow their school uniforms and have their shoes worn out. School supplies can be costly particularly when there are more than one or two children’s needs to cater to, and that includes school books too, if a household is not eligible for the school’s book-borrowing scheme.

We like to think that each year we do get smarter about our back-to-school shopping decisions. Apart from the usual supplies like books, clothes, stationery and fees, the monthly tuition fees might have increased, so have transportation cost, pocket money and extracurricular activity expenses. Children will tend to want the latest trends with peer pressure, such as cartoon-inspired schoolbags and stationery, even watches, wallets, electronic devices and school shoes. How do you make wise decisions as a parent?

In order to be prudent with money and expenses, involve the children in the school year budgeting. It seems parents tend to find it easier to talk to their children about drugs and bad habits compared to money matters. And knowing the young, many would opt for what they want in order to please themselves now, rather than what they need.

This season is a good opportunity to take charge of your spending and teach your children some healthy money habits. Educate them on the importance of saving, the benefits of achieving financial goals no matter how small, and to save money on their own if they want to buy something for themselves. Basically, they must learn that if they do not have the money for something, they should not buy it. At the same time, teach them that money has to be earned and hence, the importance of making wise spending choices. If your children are involved in every step of the spending process, they are less likely to pester you for items they understand are not in the budget or will end up unutilised in future.

To begin with, give the children an idea about your budgeting process, including the amount of money available for spending. Calculate how much you can afford to spend on school-related expenses without getting into debt or exceeding your overall budget. Then, make a comprehensive list of all anticipated expenses while leaving some money for unexpected ones.

Next, make an individual list of all your children’s expected and unexpected expenses.

• Try to recall what you had to buy in previous years (by keeping a yearly list) and discuss with other parents. 
• Find out the costs involved for extracurricular activities like sports, music and other programmes your child might enrol into, such as the cost of uniforms, membership fees, private lessons, field trips, snacks, etc.
• Rent vs Buy. Before you spend hundreds of ringgit for musical instruments or sporting equipment for activities your child may soon lose interest in, consider renting or buying used equipment instead.
• Do not forget public transportation or school bus charges, if any. If you choose to drive or car pool, calculate the cost of fuel and distance.
• Know when quality counts. For example, a good, sturdy schoolbag would last longer than a cheaper one and is thus more economical.
• Prioritise must-haves (needs) over nice-to-haves (wants). No doubt, outgrown shoes should be replaced, but you can probably get one more year's use out of an old computer if you are tight on cash. Be open with your children about budgeting and spending. Share your decision-making process with your children for them to begin learning about delayed gratification. As an added encouragement to save money, agree that if you successfully spend under budget, you will share the savings with them.

• Before shopping, spend some time with your children discussing what is needed and when it is needed to get an idea of the overall cost involved so you can plan accordingly. In about three weeks, revisit the list of things you listed under “Need Later” to see if you really need them.
• Empty the closets and check the house for last year’s stationery, usable notebooks, folders and book wrappers. Do you really need to buy new stockings when the existing ones are yet to be worn out?
• If you have more than one child to outfit for school, take advantage of sales for multiple purchases. For example, “buy one get one free” schoolbags, shoes, stockings and water bottles.
• Delay some of your purchases until after school starts. While there are back-to-school sales, try to wait for more discounts when overstocked inventory must be cleared by retailers within a few weeks. Also, your children may change their minds about what they need based on the trends they see at school.
• Remember, there will be other expenses incurred as you get into the school year, such as after-school activities and  school events, so if you plan ahead, you will be in a better position to meet such expenses. Consider the monthly expenses such as transportation and tuition fees and your child’s daily pocket money.

Budgeting

• When it comes to back-to-school shopping, new uniforms and related clothing, books, classroom supplies as well as fees for extra classes, many parents would  inevitably end up spending several hundreds of ringgit per child. Unless you have set money aside all year, you will need to determine what you can afford to spend on school-related expenses without exceeding your overall budget.
• Set a realistic budget before you go shopping. Knowing what you can afford to spend will ensure you are not still paying off a credit card balance long after your children have outgrown the items. Take a printout of your estimated budget with you when you go shopping and have your child enter all of the actual expenses.
• Encourage children to follow the budget. Emphasise to them that getting a more expensive item might mean sacrificing something else. Also encourage them to consider ways to cut costs and manage cash flow, like clipping coupons, looking for sales or buying supplies each semester. Continue the budgeting lesson by having them “live” on an ongoing monthly budget.

Comparison shop

• Show your children how to compare prices and the value of items to avoid impulse buying or paying for overpriced items.
• Back-to-school displays may be more expensive. Items moved to the front of the store and labeled with back-to-school branding may not necessarily be cheaper. This is because brands may pay more money for premium placement in the store. So, do shop around and make price comparisons.

Consider the year and not just the month

• Chances are you will be making school-related purchases all year long. To keep them from steering away from your budget, consider the entire year when you are deciding how much money to dedicate to school costs. Add a buffer for unexpected expenses.
• Buy uniforms a little larger than you need them so they might be worn for a longer period.
• Just because something is bundled does not make it a better deal. Compare the bundled item’s price per unit and loose ones of similar or other brands.
• It is always nice to have brand new things but try to opt for used text books as they are cheaper. Also try to resell old text books if they are no longer needed and in good condition.
• Another idea is to set a limit on what you will purchase and leave the upgrades to the children. If they want an Angry Birds backpack that is RM20 over your budget, make them pay for the remainder from their allowance.

Ultimately, some costs may seem small, for instance your primary school child’s daily pocket money. However, when you add up each month, you will see this is quite an amount. Small school expenses are not to be underestimated. With proper budget planning, you can use the extra unutilised money for other family needs. Remember, it is never too early to teach children about budgeting with the objective of cultivating a saving habit.

To kick off the new year, let school budgeting be a household effort and also part of our living skills.