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How to Avoid Debt with a Back-to-School Spending Plan

Raising kids is never cheap, but with the “tech-ification” of back to school, the late summer season can add a special kind of stress. With parents worrying about debt, using the early summer to make a back-to-school spending plan can cure some of that anxiety.

What do we mean by tech-ification? In Canada, about 25 per cent of kids in Grade 4 already have their own cell phone, and that number jumps to 88 per cent by Grade 11. With data plans and smartphones adding to traditional supplies like binders, pens, and duotangs, spending for back to school almost doubled from 2016 to 2017.

So, how to avoid back-to-school debt? Start with a plan to control your spending. Ensure your household budget has a line item for school-related purchases and estimate how much you’ll need to spend from September to June. You can use previous years to help with this, or if it’s the first year, do some homework online.

If your child needs certain new things such as a bike, or a laptop for school, shop around or wait for clearance sales to save up some money. A laptop can last for several years and some of the best sales are around back-to-school time. Bikes, for example, typically go on sale in September. And for more ways to save a little, something else to consider is that commuting by bike back and forth to school can also save you on transportation or bus fees.

Once you’ve built your back-to-school budget and shopped around for ways to save more, if you have a little extra cash after making your initial plan, decide whether you want to use any budget left to help relief your debt, or making “investment-type” school purchases for your child. If you’re child is young, look into investing into an RESP for their postsecondary studies.

By starting early with these type of plans, you can reduce any back-to-school debt. You can also use your spending plan for future years, adjusting as you see fit and as your child’s needs change as they get older.

Learn more about steering clear of back-to-school debt with this podcast, as BDO Licensed Insolvency Trustees (LITs) talk about how planning ahead can limit spending.

If you have tips of your own to share, share them with us and other parents using hashtags #BackToSchool #DebtSolutions #PrimaryEd

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