School is starting up again. It’s an exciting time, but it also can be financially stressful due to the need to buy school supplies. At the same time, that makes it a good time for parents to check in on their finances and make changes to keep themselves on the right track. With that in mind, here are five back-to-school budgeting and saving tips for 2022.
1. Make a budget
Start by making a budget. Budgeting helps people keep track of all their spending to ensure they’re living within their means and avoiding unnecessary debt. The traditional budgeting method involves listing income and then separating spending by categories and subcategories.
Another popular variation is the 50/30/20 method, which involves allocating 50% of spending towards needs, 30% towards wants, and 20% towards savings and investments. This method is an excellent starter budget, as it’s simple to follow.
2. Eliminate unnecessary expenses
Next, people should look through their budget and cut expenses they don’t need any longer. For example, if someone has a Netflix subscription they rarely use, they may consider canceling it and putting money back into their pocket each month. People can look at their essentials and see where they can cut as well. For instance, they could shop for cheaper brands at the grocery store and save money.
3. Set savings goals
With a budget in place and expenses trimmed, it’s time to set savings goals. Parents can look at how much they spend vs. earn and set aside a fixed percentage for that goal. Consider setting up automatic transfers, which can help diminish the temptation to spend that money and reduce the work involved in transferring money to savings. Check on savings goals regularly, such as every month. Make adjustments as needed based on income and spending.
4. Get a life insurance policy
Life insurance can help give loved ones added financial protection. For example, suppose the policyholder passes away unexpectedly while the policy is in force. In that case, beneficiaries can receive the death benefit to replace their income and pay for school and other expenses.
Term life insurance is often more affordable, but it expires in 10 to 30 years, depending on the term length. Permanent life insurance is typically more expensive, but coverage lasts a lifetime, and policyholders can also build wealth through the cash value growth component. Once this cash value grows large enough, policyholders can borrow against it and withdraw from it to cover school-related or other expenses. They can also surrender their policy and get the full cash value minus surrender charges.
Fidelity Life offers affordable and accessible life insurance policies to get parents the coverage they need for the back-to-school season. Parents can quickly and easily obtain life insurance quotes online and can often receive coverage the same day they apply for a policy.
5. Shop school supply discounts
Many stores run discounts and offer coupons around the school year. Spend time looking for these sales and clipping coupons to cut spending on school supplies. Shopping online can help parents find more of these in less time. They can look for the best deals and compare from the comfort of their couch. Plus, they can shop through cashback websites. These pay the shopper a percentage of the money they spend at qualifying sites. For example, a website might pay shoppers 3% cash back for using its referral link to shop at a specific online store. Combine this with discounts, coupons, and a cashback credit card to maximize savings and cashback.
Save money on back-to-school season
Now that summer is ending and school is starting, it’s time for parents to make some adjustments to ensure they’re making progress financially. Start by creating and sticking to a budget by listing income and categorizing expenses. With that in place, set savings goals, and slash expenses to reach them faster. Shop for a life insurance policy to protect loved ones and take advantage of school-related discounts and coupons to cut school-related spending. Following these tips will help parents save money this school year.