How to avoid back-to-school debt

Remember those office-supply-store commercials about this being the “most wonderful time of the year?” Next to Christmas, back-to-school is the second-biggest season for shopping, and here in Canada, school-supply spending is expected to rise 4.5 per cent in 2016. Even with trying economic times in some provinces, stocking up on school supplies is usually a necessity come September. But how do you do it without taking on debt?

It might help to think of back-to-school shopping the same way as buying groceries. Use up any leftovers (from last school year) and stay away from the pricier brand names. Some schools might mention certain brands on their shopping list, but that doesn’t mean you have to buy them. And if you can get any second-hand items, like backpacks or lunchboxes online, or from friends or family, that could also help you cut costs.

How the Canada Child Benefit could help your budget

The new Canada Child Benefit (CCB) from the federal government could help eligible families with their back-to-school spending. Families who qualify for the CCB can receive up to $5,400 a year, paid monthly, for children between 6 and 17 years old. This is much more generous than the previous program, and could certainly help with back-to-school budgeting.

If you haven’t already updated your monthly budget to take this extra income into account, this would be a good time to review it. It’s also important to set a specific budget for back-to-school spending so you can buy the items you need without relying on debt.

Time to start a side hustle?

If you find that your budget might not account for all the school supplies you need, you could avoid debt by finding ways to earn extra income. Aside from the usual apps and websites offering freelance gigs, September might be a good time to sharpen your skills as a tutor. If you were particularly strong at a certain subject, like math, and enjoy working with kids, it’s time to dust off your old textbooks. You could post an ad on a classified website or your local bulletin board in order to drum up business.

Avoid the temptation of student credit cards

The unfortunate reality is that Canadians heading off to university next month are going to graduate with record levels of student debt. It can be tough to manage student loan payments on an entry-level salary—adding unmanageable levels of credit card debt would only compound the problem. This is also the season for student credit card offers, whether you see them on-campus or at your local bank. And while it’s true that these cards typically come with lower fees or special rates for students, it’s still important to be able to manage your debt. Earning rewards points should not be a priority when you’re in school; we’d suggest using cash whenever possible and tracking your spending with a monthly budget.

If you’re living away from home for the first time and looking to create your own budget, the Financial Consumer Agency of Canada (FCAC) has a great online budgeting tool that can help you figure out how much you earn and what you owe on a monthly basis. The FCAC also offers valuable lessons in financial literacy, including modules on moving out on your own and paying for post-secondary education.

Whether buying backpacks for your kids or textbooks for your classes, back-to-school spending doesn’t have to be stressful. Tweet us your back-to-school tips using the hashtags #BDOdebtrelief #LetsTalkDebt