- Planning a sinking fund for school expenses can help you stay within your budget this year.
- Senior year and other milestone grades tend to be more expensive.
- Don’t forget to include expenses for sports registrations and after-school care.
Many parents budget for back-to-school essentials like backpacks and clothes, but they often overlook other school-related costs that come up throughout the year, according to James Allen, a certified financial planner and financial education instructor.
“The most commonly overlooked expenses in a school year are the ones that sneak up on you,” he said. “Field trips, fundraising events, school photos, and after-school clubs may not seem significant individually, but they can have a substantial impact on your budget when combined.”
Fortunately, Allen and other financial experts say that with some planning, it’s possible to create a school year budget that covers all expenses. Here’s how:
Create a Sinking Fund for School Expenses
Trying to predict every expense can be challenging, especially since a school’s needs can be unique and constantly changing, as mentioned by Kari Lorz, a certified financial education instructor, mom, and founder of Money for the Mamas.
Instead of attempting to forecast a year’s worth of expenses, Lorz suggests establishing a sinking fund. This involves setting aside a designated amount of money each month in your savings specifically for school-related expenses. Start by allocating $40 to $80 per month to this fund. While some of the money will be used for monthly expenses like sports fees and book fairs, ideally, the amount will grow over time and cover most of the year’s expenses.
Account for More Expensive Years
Not all school years are equally costly. According to Lauren Tingley, a teacher and creator of Simply Well Balanced, many parents are surprised by how expensive senior year can be. Expenses such as senior photos, college visits, and prom can add up quickly.
However, you may also encounter other expensive years such as 5th or 8th grade, which involve numerous social commitments, activities, and school trips. In such cases, consider increasing your sinking fund contributions to cover the additional expenses.
Consider Beyond the School Year
While budgeting for school-related expenses is important, it’s also crucial to consider other costs associated with your children. After-school care, especially if used occasionally, is often overlooked in the budget.
“Whether your child needs transportation home from practice or someone to look after them until you finish work, you need to budget for these additional expenses,” advises Tingley.
Furthermore, during your school year planning, take into account childcare arrangements for the following summer. You might have initially budgeted for day camp but discover that your child is interested in more expensive sleep-away or sports-focused options.
“Not having a summer camp budget can be a financial shock, particularly for first-time parents who aren’t familiar with the preparation and spending involved in sending their children to camp,” warns Michelle Griffith, a senior wealth advisor with Citi.
Budget for Gifts and Donations
Once you’ve accounted for your children’s expenses, don’t forget about others, such as appreciation gifts for teachers and birthday gifts for classmates.
“Spending on birthday gifts alone for a month can easily match the amount spent on back-to-school items,” says Griffith.
You can include gifts in your education or school sinking fund, or create a separate sinking fund dedicated solely to presents for others.
If you have some extra funds after considering all these expenses, consider budgeting for donations to the classroom or Parent-Teacher Organization (PTO).
“Many teachers spend their own money on engaging curriculum and experiences for your children in schools that don’t provide adequate resources,” mentions Tingley. “Even a small donation can make a difference and show your appreciation for their hard work.”
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