ABC and 123: A Learning Collaborative: 5 Tips for School Year Budgeting

Monday, September 10, 2012

5 Tips for School Year Budgeting

The first day of school serves as a fresh start for many families. While the return
of after-school homework and soccer practices may bring relief to your summer
activities budget, there are many new expenses families must take on once the
school year is underway. From field trip fees, to attending birthday parties, to
purchasing new cleats for the big game, there is a lot for which to plan.

But preparing for the school year doesn’t have to mean an end to all fun family
activities. Parents and kids can work together to plan for upcoming events and
purchases they anticipate making during the school year. To help families enjoy
this exciting time of new beginnings, and to help kids learn a thing or two about
finances, T. Rowe Price has developed the following four tips to make planning
for the school year an educational and fun experience for both parents and

Set a goal – Whether it’s a spring field trip or a vacation planned for winter
break, the start of the school year is the right time to set financial goals for
upcoming events. Check in with your child throughout the year to monitor their
progress and remind them of their goals. When you discuss the importance of
making savings goals with your children, you help them understand how to plan
for expenses and become a smart saver and spender.

Build a calendar – Many teachers will provide a list of school events (like
picture day or a book fair) that may require students to pay a fee. Use this list to
build a calendar and outline a budget for these extra expenses. Don’t forget to
include friends’ birthday parties where your child may need to bring a gift, or
basketball tournaments that may include new uniforms and travel expenses.

Identify trade-offs – As you follow the calendar and budget throughout the
year, use the concept of making trade-offs to help kids make choices when it
comes to spending. For example, would they rather purchase a new video game
during the winter months or save for a new baseball glove once the season starts
in March? Including specific items on the budget can bring savings to life and be
used to help explain that in order to buy everything needed for the school year,
you have to make a trade-off and not purchase unnecessary items.

Account for the unexpected – Unexpected expenses can happen any time of year, but the school year presents an influx of expenses many families don’t always factor in, even with a calendar. Whether it’s supplies for a science project, fund-raising events, or a costume for the play, you can use these unforeseen events as a lesson to teach about saving and reserving money for life’s surprises.

“For those parents with older teens, many unexpected costs arise from ongoing
socializing costs, as kids at this age want to do more things with their friends,”
said Stuart Ritter, CFP, Senior Financial Planner for T. Rowe Price. “In our
family, we reserve $20 as a weekly expense for those social outings with friends.
Setting this expense as a goal helps keep us on track.”

As the school days become routine and your calendar and budget have fallen
into place, parents can continue money conversations with other fun activities.
For ideas, T. Rowe Price has created the Family Center app on their Facebook
page, which provides parents with tools to help teach their kids about money.
Parents can also help kids learn basic money lessons by downloading the
Journey to Your Dream Goal activity book from the Facebook page, or by going
directly to The Great Piggy Bank Adventure®, an online board game developed in
collaboration with Walt Disney Imagineering.

This fall, use this exciting time as an opportunity to talk with your kids about the
importance of planning ahead and setting financial goals for the school year. By
using T. Rowe Price’s tips, you can start the year organized and prepared while
providing your children with valuable money lessons that will set them on the
right path for this year and beyond.

T. Rowe Price and Disney Enterprises, Inc., are not affiliated companies.

Disclosure: This guest post is written and share by T. Rowe Price.


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