Back-to-school so back to the bank?
September is around the corner and that means back-to-school shopping season is in full swing.
According to a RetailMeNot.ca 2016 survey, Canadian parents will spend an average of $472 per child for back-to-school shopping. That’s not trivial. The costs even become higher for older children at the university level – parents reported spending $1,630 per child, despite the fact that 64 per cent believed those in post-secondary education should financially support themselves.
Canadians continue to fund these shopping wants and needs largely on credit, credit that is not paid back in a timely manner. This means more liabilities pile up with the bank. The number of Canadians carrying a balance on a credit card rose to 20.4 million in the first three months of 2017. This is a 3.5% increase from the 19.7 million consumers carrying credit card balances in the first quarter of 2015, according to a TransUnion report.
Does your back-to-school shopping automatically mean going back to the bank for more credit?
If so, I’ll share some solutions for you today.
he Credit Counselling Society is concerned about Canadians, who are stretching themselves financially (no affiliation). They reached out to yours truly recently to help get the word out about how families can save some money with back-to-school shopping this fall. I got a chance to talk to Gary Tymoschuk, Vice President – Operations from the Credit Counselling Society about this very topic.
Gary, thanks for taking time to visit the blog and work with me on this subject.
My pleasure, Mark. Any time we get to help Canadians with their personal finances is well worth it.
Back-to-school on a budget. Like everything else, seems like a great concept. So where do families go wrong?
People end up buying on impulse, or not researching the marketplace (e.g., checking what the prices should be for items) – we all know that not every store or website will sell the same item for the same cost. And we can’t forget peer-pressure. Some kids will push their parents to make certain purchases because their friend has that style, type of clothing or school supply. Due to procrastination and putting things off until the last minute, some people may feel forced to buy the first thing they see.
So knowing these pitfalls, what can parents do better?
The first thing is to build a budget. Take time to research – know your prices and the marketplace in general; know what retailer might be the best place for lowest prices; and know where to shop (online, discount retailer or second hand/consignment store).
Second be determined to stick to your budget. Don’t allow yourself to waiver from it. If you go over on this item, you need to be under by the same amount on another item. Understand the difference between needs and wants.
Lastly, allow sufficient time to make the purchases, so you won’t have to make purchases on impulse.
Impulse seems to be a theme. Are there particular sites or resources more parents should be using to improve their money management practices?
I think so Mark. Here are a couple:
The FCAC (Financial Consumer Agency of Canada) This excellent site provides resources for Canadians at different stages of their lives, including having a family.
Consider MyMoneyCoach.ca. This is a free public online service provided by us (the Credit Counselling Society (CCS)). This site provides information, tools, live webinars and in-person workshops for Canadians. Canadian parents can take a budgeting workshop at their local library or join a webinar on budgeting. When it comes to personal finance, the basics are the basics and once they’re comfortable, parents can start to teach their kids about money. For example, in our “Raising Financially Fit Kids,” we talk about different lessons and concepts on how to teach kids at various ages.
Beyond parents improving their own financial literacy and behaviour, should parents take any time to talk to their children about money principles?
Absolutely! Parents should include children in discussions about finances to help them gain a greater understanding about money – there is no endless supply, but only so much of it. Children should be taught what a budget is, how to make one and then how to live within it. They should learn the difference between needs and wants. Children should also be taught how to shop for sales and specials, so they are able to see how far their money can go, in addition to getting more for their money.
Finally, what lessons learned should parents consider applying to next year’s back-to-school – so they don’t simply repeat bad habits?
Having a budget – all the time – is really the only way to ensure that both every day expenses and infrequent and/or irregular expenses like back-to-school, birthdays and Christmas can be well managed. This will prepare individuals for those expenditures when they come up and ultimately lessen the stress for everyone.
When it comes to personal finance everything is personal but the basics are universal. Some boring money advice actually never goes out of style however I can appreciate saying you’re going to do something and actually doing it are very different things in life…
We’ve decided this is a better way to budget but your approach might be different – so I encourage you to find what works for you and stick with it. If you need some specific back-to-school shopping tips check out these articles Gary highlighted to me:
I want to thank Gary for his time and references today. I also want to wish you well in your pursuit of a better back-to-school budget.
What tips or tricks do you use to keep your budget in check? Share away. Thanks for reading.