Don't Let Back-to-School Spending Drain Your Budget

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Certified Financial Planner Board of Standards, Inc.

Aug 16, 2011, 08:00 ET

Consumer Advocate Offers Tips on How to Save on Education Expenses

WASHINGTON, Aug. 16, 2011 /PRNewswire-USNewswire/ -- Consumers this year will spend an estimated $23 billion equipping and clothing students grades K to 12 and another $46 billion will be spent on college-bound students.(1) According to Certified Financial Planner Board of Standards Consumer Advocate Eleanor Blayney, CFP®, increased costs for goods like clothing and electronics coupled with an unsteady economic environment could leave many parents financially drained if they don't plan wisely.

"At a time when many American families are worried about the economy, the added strain of back-to-school expenses can unduly stress parents, both emotionally and financially," says Blayney. "By taking a proactive approach and using a smart financial plan, consumers can keep their children's school costs affordable and reduce the stress on themselves and their finances."

Blayney offers the following strategies for parents and students looking to keep back-to-school expenses in check:

Take advantage of the "sales tax" holidays. This year, 17 states will offer some kind of sales tax reprieve, generally for two to seven days, beginning in August. To determine when, and if, your state eliminates or reduces sales taxes, and for what items, contact your state's Comptroller's office or Department of Taxation.
Contact your child's school to get a list of required supplies. Knowing rather than guessing at what is needed should save on unnecessary expenses, as well as the price of fuel to return unwanted items
Leave the kids at home when you shop. According to 2011 survey data from the National Retail Federation, 51.7 percent of back-to-school spending is directly influenced by kids. As any parent knows, items that are not on the "list" have an uncanny way of showing up in our carts when we have our kids along, and it is often easier to capitulate rather than argue at the register. (However, if you do shop with your kids, enlist their help in keeping within your budget. It's a great learning opportunity for them about the importance of controlling expenses.)
Learn the new tax rules. For college kids with 529 plans, be aware of a potentially expensive pitfall as a result of 2011 tax legislation. Formerly, withdrawals for computers, electronics and internet services were considered as qualified educational expenses, and were therefore tax-free. Now, however, a 10 percent penalty may be imposed if money from the 529 plan is used for these purchases, unless they are required by the college, university or technical school. Be sure to check with your child's school to avoid this penalty.

For those parents able to spend a little extra during the back-to-school season, Blayney has a final idea to help defray the cost of education.

"Buy your child's teacher a gift card at the beginning of the school year, rather than waiting, as most parents do, till next June," Blayney offers. "The amount of money that the average teacher will spend out-of-pocket for school supplies for the classroom is, in fact, more than 75 percent of what the average family is projected to spend this school shopping season. Consider your help with these costs as not just another school expense, but a way to invest in your child's classroom experience and education."

(1) "2011 Back-to-School Survey," National Retail Federation, July 21, 2011. Online at http://www.nrf.com/modules.php?name=News&op=viewlive&sp_id=1157

ABOUT CFP BOARD

The mission of Certified Financial Planner Board of Standards, Inc. is to benefit the public by granting the CFP® certification and upholding it as the recognized standard of excellence for personal financial planning. The Board of Directors, in furthering CFP Board's mission, acts on behalf of the public, CFP® professionals and other stakeholders. CFP Board owns the certification marks CFP®, Certified Financial Planner™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements. CFP Board currently authorizes more than 62,000 individuals to use these marks in the U.S.

SOURCE Certified Financial Planner Board of Standards, Inc.