Written by Anita Saulite
Wednesday, August 29th, 2018
According to a report released by Global News, parents spend more on back-to-school shopping than holiday shopping. In 2017, Canadians spent $883 per family on back-to-school supplies and fashion, or $325 more than they spent on holiday gifts in 2016.
In addition the report says, "Over half of parents said that shopping in preparation for the first day of school put a strain on household finances, with nearly 40 per cent reporting that it takes months for them to pay off the bill."
Unexpected expenses can pop up. The Financial Consumer Agency of Canada recommends using a student budget planner to estimate school costs and create a back-to-school budget. The checklist is intended to take the guesswork out of planning.
Here are a few costs people tend to underestimate.
Technology Products Are the Biggest Ticket Items
It probably isn't a surprise to parents that tech items are some of the biggest ticket items in back-to-school costs. In 2017, families spent around $580 on laptops and over $250 on smart phones, according to a poll conducted by Angus Reid on behalf of RetailMeNot.ca. To compare, families spend around $100 for school supplies and $300 for clothing.
Hidden Phone Costs
Many telecoms in Canada offer basic phone plans for around $25 a month. But be careful, because most don't offer data or unlimited texts, and many no frill plans have hidden fees for additional minutes or roaming according to Statistics Canada.
Costs for these can really add up and create a financial setback. To safeguard consumers, the CRTC has new usage rules. "A service provider must suspend data overage charges once you reach $50 within a single monthly billing cycle, unless the account holder or authorized user expressly consents to pay additional charges."
If you decide to purchase a phone for your child, talk to them first about how their plan works, so they know what they can and can't do with their phones.
Student Activity Fees
If you play a varsity sport at high school or college/university be prepared to pay extra money for equipment, tournaments and other sport-related fees. These expenses can really catch a family off-guard and can add up to hundreds of dollars not counting any extras your child might be expected to have already.
If your child plays sports at a more competitive level, the costs can rise even higher.
According to a recent CNBC news report, the average person spends around $450 a month on impulse buys and over two-thirds spend it on food. Dining out can really add up.
Aside from the cost of the meal, there's tipping, tax and parking. Credit Canada encourages young people to try to live less in the moment and avoid temptations.
Parents can cut down on these impulse purchases by packing lunches for their children, or providing just enough money for a school cafeteria lunch.
The Cost of Living
With inflation currently at around 2.5%, the highest it's been in a long time, it's important to factor in yearly price increases for everything, especially food and gas. You'll likely have to spend more year-to-year, so budgeting for inflation can help you if prices rise on certain items.
The back-to-school period is one where it's easy to spend more than expected on electronics, school supplies, clothes and food. While there are certain things that need to be purchased around this time, plan for school expenses all year around. It could make this time of year a little less stressful.