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How to Reduce Back-to-School Debt by Planning Now

Does back-to-school season raise your stress levels? As parents, the end of summer can arrive with a bang — all of a sudden, it’s a scramble to buy supplies, get the kids new clothes, and prepare them for another school year. If this stress coincides with higher spending, it can also leave you with regret in the fall – and the need to reduce your debt.

Canadian parents are spending more during back-to-school season. According to a RetailMeNot Inc. poll from last summer, households expected to spend an average of $883 on the 2017 school season, an increase from $450 in 2016 — almost double. For parents, supply lists get longer, high tech (iPads, laptops) are making their way into more classrooms, and store promotions are starting earlier.

Whether you’re sending your kids back to elementary, secondary or post-secondary, parents can and should start planning as early as possible to limit their spending. The summer months are a great time to make a budget for the fall, and start thinking long-term about their children’s education. Here are some tips to get that done.

Saving on supplies, big ticket items.                     

There’s no question supply shopping can be stressful. Stores are busy, filled with people and promotions. It can be hard to know where to find the best deals. Here are a couple tactics to use as you start supply shopping.

  • Spread out your purchase window. If you’re someone who keeps a monthly budget, spreading out your purchases from July to October can benefit you. This reduces the pressure of those one-weekend back to school shopping sprees, where tempting displays are set up to take advantage of parents’ wallets.
  • Find out the best time for the best deals. Timing is everything. Often you’ll find better deals before or after “back-to-school” time. While August is the best time to buy backpacks, later in September is the best time to buy last year’s models of bikes. October is the best time to buy jeans and other clothing, as stores try to shift their supply to winter outfits. You can also find better deals on big ticket electronics around Thanksgiving, with Black Friday prices sometimes marked lower than the deals you can find in late August.

Don’t forget saving for post-secondary!

If you see a future at university or college for your child, it’s never too early to start making a financial plan and putting money aside. With the average university grad in Canada leaving school with over $26,000 in consumer debt, any contribution parents can provide will help with upfront costs. The more money you have at the outset of college, the less student loans your child will need to take out.

This article by Julie Cazzin in Maclean’s shows you how you can start planning for university, even when your kids are as young as two years old! Starting a registered education savings plan (RESP) at this age maximizes the time you have to get return on your investment. It also allows you to adjust and change your savings plan as years go by.

Finally, consumer debt is a big concern for a lot of parents with school-aged kids. Summer can also be an excellent time to take stock of your debt relief options. Tallying your debt, the interest rates you’re paying, and how long you expect to carry it can be an eye-opening experience – especially going into a “big spend” season like back to school.

If you’re concerned, research available debt relief options. Finding a debt solution and resolving to pay down your debt balances will give you a clearer picture of your finances as you head into the busy fall season ahead.

Do you have tips on how to reduce back-to-school debt now and in future years? Join our conversation on social media, using the hashtags #BackToSchool, #DebtSolutions, and #FamilyFinances.

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