Back-to-School

Article written by Scott M. Kahan in Stroll Chappaqua - August 2024 Magazine

Back-to-school season is a natural time for families to reassess and organize their finances for several reasons:

1. Increased Expenses:

The start of a new school year brings a wave of expenses, including school supplies, clothing, technology, extracurricular fees, and transportation costs. Families often need to budget and plan for these expenses to avoid financial strain.

2. Routine Reset:

The transition from summer to the school year marks a return to routine. This period of change provides an opportunity for families to review their financial situation, set new goals, and establish better financial habits. It’s a chance to reset spending patterns that may have become lax over the summer.

3. Educational Opportunities:

The back-to-school period emphasizes the importance of education, not just for children but also for adults. Parents might take this opportunity to educate themselves and their children about financial literacy, teaching budgeting, saving, and responsible spending.

4. Holiday Preparation:

With the holiday season on the horizon, getting finances in order during the back-to school period can help families better manage upcoming holiday expenses. Planning and budgeting early can prevent holiday-related financial stress.

5. Year-End Planning:

The start of the school year signals that the year is more than halfway over. This can prompt families to evaluate their financial progress for the year and make any necessary adjustments to meet their annual financial goals.

6. Income Adjustments:

For some families, back-to-school time may coincide with work schedules or employment changes. Parents may return to work
or adjust their hours as children go back to school, impacting household income and necessitating a review of the family budget.

7. Tax Benefits:

Certain back-to-school expenses, such as education-related expenses or childcare costs, may be eligible for tax deductions or credits. Understanding these potential benefits can motivate families to get their finances in order and take advantage of any available savings.

8. Long-Term Planning:

The start of a new school year can prompt families to think about longer-term financial goals, such as saving for college and retirement. Make sure you are funding 529 College Savings plans and your 401K or other retirement savings vehicles. This forward-looking approach encourages disciplined saving and financial planning.

In essence, the back-to-school period serves as a financial checkpoint for families, providing a structured opportunity to review, organize, and improve their financial situation. This proactive approach helps manage immediate expenses and sets the foundation for future financial stability.

If you have any questions or need help organizing your finances, reach out to us. FAM is a fee-only financial planning and investment firm. We are Certified Financial Planner™ professionals and fiduciaries, always putting your interests ahead of ours.