Financial Wellness @ Work

GUEST BLOG POST: Back to school

The countdown begins. American retailers are doing a happy dance, while American kids are doing a sad shuffle. It’s time to go back to school.

Parents and providers are counting, too, not just the days, but the money they’ll need to get their students ready. As a nation, we will spend approximately $23 billion to equip and clothe our kids for grades K to 12. When our college-bound children are considered, that adds another $46 billion to the price tag. This anticipated surge in consumer spending is second only to the money we will spend for the holidays at the end of the year.

According to the National Retail Federation, parents feeling drained by the uncertain economic climate will be looking for ways to keep their expenditures in check, resulting in flat year-over-year projected spending for 2011.

Unfortunately, the inflation numbers for clothing –second only to electronics in terms of amounts spent – are not making it easy for parents to rein in school expenses. Huge increases earlier this year in the price of cotton are likely to translate into higher prices for such school staples as backpacks and jeans, as compared to last year. Here are some tips to keep your back-to-school spending in line.

  • Take advantage of the “sales tax” holidays that may be available in your state to do your back-to-school shopping. 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.
  • Shop online from out-of-state retailers. This is another way to avoid state sales taxes in most states. However, be aware that some states are now imposing user taxes to capture revenue otherwise lost in online sales. Again, if in doubt, check with your state taxing authority.
  • Consider a neighborhood back-to-school swap of supplies and clothing. Sometimes different may be just as good as new, from your child’s perspective. What’s more, the useful life of many school items is often longer than your child’s need for them, so take advantage of the bargain prices for second-hand items.

Look for the second post in Eleanor’s back to school series for savvy tips for saving on school supplies.

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