Author Katrina Shanks, CEO Financial Advice NZ Article originally published in Stuff.co.nz.
There’s no doubt the costs of starting a new school year can be overwhelming, coming as they do on the back of Christmas spending, summer holidays, and entertaining the kids for weeks on end.
It seems endless: uniforms, sports equipment, stationery, laptops, text books, lunch boxes and bags, school donations and/or fees (which are voluntary in state schools and most integrated schools), and camps, to name just a few.
Research conducted by school uniform retailer Postie in 2019 showed the stress of adding new school uniforms into the household budget was a reality for 70 per cent of more than 1000 parents surveyed. Some 64 per cent said they had made sacrifices to be able to afford school uniform items for their children.
But where once the main cost was in school uniforms – which can range between $250 and $1000 depending on each school’s requirements, with girls’ uniforms tending to cost more – it’s now technology that’s the big cost.
Some schools (usually from Intermediate/Year 6 and on) require their pupils to have a specific Chromebook, tablet or laptop, and for most parents that can mean anywhere from $350 to $2000!
That’s big money, especially for families with children whose ages are not too far apart. So, what are the best ways of meeting these big expenses?
Many families set up a separate bank account for children’s costs that they contribute to each pay, so when January rolls around there are no lump sums to find, and it’s mostly smooth sailing. And some have the capacity for lump sums out of their daily living, so it’s no big deal.
But for many, either there’s never enough money outside weekly living expenses to save up, or they have not yet developed the financial disciplines of saving in advance for known costs
If you’re one of the many families who struggle with the beginning of a school year financially, here are some tips that may help smooth the way before you set up a separate bank account for next year.
There is absolutely nothing wrong with second-hand, be it blazers, laptops, text books. Using this much cheaper option not saves you money but also puts money into another family’s pocket for their school expenses. If you have children in that growth phase, a school uniform may be out-grown really quickly, so this can be a smart move.
Start a swap within your friends’ group – you’ll be surprised at the amount of sports gear, musical instruments and uniform which sits in the back of peoples’ cupboards and which they haven’t got around to doing anything about.
Wait for the stationery sales that come every year. Normally, the big retailers have big back-to-school sales, where stationery is significantly discounted. Some schools have discount arrangements with stores and stationery lists supplied to the retailers.
Shop online by using the lists supplied by the schools. This will eliminate the extras that can get thrown in or the upgrades to those nicer pencils and pens that add up if shopping in person with your child/ren. You don’t need to buy flash stationery coverings – buy the see-through cover and make the designs yourself.
If school donations or fees are required see if there are payment plans in advance, so you can chip away at these costs.
If you can’t find the funds in this pay or the next to obtain what your children need, and you’re good at paying off credit then Buy Now Pay Later may be a good option to smooth out the lump sum. But remember this does eat into your future cashflow, and you need to be able to make the payments in the future (doing so on time means the credit is free).
If you qualify, Work and Income could also offer an assistance payment or an advance benefit payment to help cover the cost of uniforms and stationery.
Preparing for the new school year is a great time to get the kids involved in making a budget and working out how much these items costs and how much is needed to pay for these.
Schooling costs may well be the first time that your teenage child starts to appreciate the cost of things that they do so it’s an opportunity to use this experience to assist them to understand the value of money.
This may mean there’s less negotiation for the nicer stationery, and second-hand or swapping items with friends can be a positive fun experience. You could get them to do jobs around the house if they want to add something extra to the list. Giving that extra item a value you have to plan and work for is a great message for the future.
In our family of three children, we took the separate bank account approach and put money into it every pay to smooth-out the lumpiness of expenditure at the beginning of each year and term.
In the words of my financial adviser, it’s about having good financial behaviours all year round, so you’re prepared for your fixed costs without unnecessary financial pressure.