Building a back-to-school budget

In 2014, Forbes reported that Accenture estimated (http://newsroom.accenture.com/images/20020/Graphic.pdf) that nearly half of respondents reported they would spend $500 or more on back-to-school expenses, including not only clothes and desk supplies, but electronics as well.

Yet there’s one more aspect of back-to-school spending that’s growing and can add hundreds – and sometimes thousands – to a family’s overall K-12 education budget. Since the 2008 economic crisis, many public school systems have tried to make up for funding shortfalls by adding first-time or expanded fees for sports, extracurricular activities and specialized academics.

This means that back-to-school budgeting, even for families with kids in public school, now requires a more holistic, year-round approach to all back-to-school expenses.

Given their potential dollar amounts, parents should examine school fees first. Public education has never been completely free of charge beyond local taxes – parents have traditionally paid extra money to support their kids’ participation in sports, music or other extracurricular activities. However, many school systems are adding fees for a broader range of offerings including after-school activities, top-level courses, lab-based instruction and even Advanced Placement (AP) classes. So before you start spending money on clothes and supplies that can be bought off-season, on sale or possibly used, get a handle on how applicable instruction and activity fees might affect your budget. (http://www.practicalmoneyskills.com/ budgeting/). Parents in financial need may qualify for public aid or grants to cover such fees; if not, choices will need to be made.

Consider turning back-to-school shopping into a money lesson. Most kids like to have certain kinds of clothes, shoes or supplies. Those "wants" can be turned into a discussion about spending priorities, value, choice and comparison shopping. Using the Back to School Budget (http://practicalmoneyskills.com/calculators/calculate/backToSchoolBudget.php?calcCategory=family) calculator with your kids can help them learn how create a budget before shopping for essentials. As kids get older, the discussion can expand to cover bigger-ticket purchases like smartphones, computers and fees for special courses and activities they want to pursue. Some of these issues might evolve into a discussion about earning money through chores or a part-time job.

Once priorities are decided, every expense should be tracked, including a child’s round trip school transportation, meals, tutoring fees or immunization and healthcare expenses not covered by insurance. And once that budget is set, it means a constant search for smart ways to cut. Some ideas may include:

Car pooling (track your costs to make sure you’re not adding significantly to your overall transportation budget)Packing lunches at homeWorking with school administrators to raise outside donations or grant funding to cover parents’ out-of-pocket costsOrganizing school supplies in one place to avoid purchasing duplicatesRenting equipment, supplies or instruments used until a child’s interests are establishedScouting garage sales, thrift shops and online marketplaces for used, required-edition textbooks, instruments, electronics, sports equipment, clothes and other supplies you’d otherwise buy new; online resources shouldn’t charge shipping or return feesReviewing school and classroom supply lists before buying essentialsBulk- and group-buying supplies and services with other parents to get volume pricesConsolidating back-to-school shopping during tax-free days (if your state offers them)Swapping used supplies and equipment with other parentsChecking retail memberships for any back-to-school savings they offerWatching for print and online coupons or special discount offers through your schoolListening to your kids – they might spot money-saving ideas faster than you can

One final secret budget item – rewards. Saving money on back-to-school expenses can help parents meet a number of financial goals, but kids’ academic or activity success deserves recognition. Consider setting aside a little of those savings for a reward they can enjoy.

Bottom line: When setting your back-to-school budget this year, think beyond the supplies. Consider every possible fee and expense associated with your child’s school year and plan accordingly.

Nathaniel Sillin directs Visa’s financial education programs. To follow Practical Money Skills on Twitter: www.twitter.com/PracticalMoney.