Every Summer the new school year comes around seemingly out of nowhere. It feels like only yesterday that we were stressing about Christmas dinner and how to entertain the kids over the long, hot break. And with the secretly welcomed return to routine comes a range of expenses to kit the kids out for the new school year. Being so close to Christmas, most of us find it really difficult to cover these costs without some planning and sacrifice. So what can we do to make the start of the school year easier?

What school expenses should you expect

In 2017 the Australian Scholarships Group (ASG) Planning and Education Index looked at the total cost of a Kiwi child attending school. And it’s scary to see how much it actually costs. For a child born in 2017 it’s estimated to cost

• $38,362 to send a child to a state school for 13 years of education
• $109,354 for a state-integrated education over the same term
• A whopping $345,996 for the same child to attend a private school for 13 years
• This cost has increased by more than double the rate of inflation over the 2007 to 2017 period

What costs should you expect

• Textbooks and required reading resources.
• A device suitable for the classroom. This may be a tablet or a laptop, and generally won’t be cheap.
• Stationary and supplies. This can range from pens, pencils up to scientific calculators and specialised classroom equipment.
• New uniforms and sports gear, which any parent knows isn’t cheap, especially given the short lifespan.
• Sports events, field trips and school camps
• “Voluntary” donations. These really are voluntary, despite the guilt trip the schools pull, so this is a good place to start when looking at potential cost cuts.

How to prepare for back to school costs

We plan for retirement, buying our own home and other major events. But we often overlook the recurring costs of the kids education. With some planning and discipline we can get on top of this and avoid the financial scramble each year. The first thing to do is start saving well in advance. If you set up an online only sub account, you can squirrel away a small amount each week (starting today) and by next school year you’ll have a slush fund ready to tackle the costs.

Whilst it doesn’t solve this years financial drain, this small and regular contribution will alleviate a huge amount of pressure next year. Start with as little as $10 per week per child and by January next year you’ll have $520 to kick things off. This may or may not be enough, so when you do your shopping this year, keep every receipt in a drawer or a shoe box. Then after the initial back to school shopping is done, tally up the total costs and work out exactly how much you need to save this year. You can then increase or decrease your weekly contribution accordingly.

It’s really important to remember that the ongoing school costs are in addition to this. There’s no point saving throughout the year if you’re constantly dipping into the account for a mid-year camp or replacement items, leaving you with nothing come the New Year. So when you’re budgeting, be sure to make an allowance for these extra costs that pop up in terms 2, 3 and 4.

So next year is planned for, but what about now?

With a proactive approach, next year will be a lot easier on the purse strings. But that doesn’t necessarily help you with this years costs. So what are your options:

• Get a personal loan
  If you simply don’t have the funds, you can look at the option of borrowing money and paying it off over an extended period of time. There’s obviously an additional cost that you’ll incur, with interest and fees on top of the initial loan. However with small, fixed and regular repayments, this is an easy way to spread the cost of the expensive return to school over a longer period of time. Pronto Finance offers back to school loans to help with this kind of situation.
• Use your credit card
  Another option that incurs additional costs, this can be a good option if you’re able to clear your account balance before the month is out. But beware of only making minimum repayments, as credit cards have a way of trapping people in debt, with no fixed term or scheduled repayments reducing the principal.
• Seek help from family and friends
  It’s never easy asking family and friends for money. But if you come up with a detailed payback plan and stick to it, then this is a low cost option to consider.
• Work and income loans
  Depending on your income WINZ may be able to assist with a loan for stationary and school uniforms. The criteria for this is regularly changing, so get in touch with WINZ to see if you qualify.
• School
  Some schools offer hardship grants and payment plans to make things easier. Get in touch with the school and ask what the options are. It’s very likely you’re not the only one feeling the pinch and most educational institutions have different ways to help out.

What to look at when comparing alternatives

Personal loans come with interest and fees attached. So it’s vital to look into the total cost of this option. Secured loans will generally be cheaper than unsecured, so if this is an option then it’s one way to get a low interest rate. But be sure to assess not just the interest cost, but also the fees involved. It’s always best to compare the total cost of each option, that way you’re comparing apples with apples.

Credit cards on the other hand often have low fees but a relatively high interest rate. However it’s the risky requirement for only a minimum payment that can be a trap for a lot of people. If you can clear the balance at the end of the month then this is a good option. But if you can’t then you need to look at how much it will cost to roll over interest each month.