- Having a sinking fund for school expenses can keep you on budget this year.
- Certain grades, like senior year, are particularly expensive.
Lots of parents budget for back-to-school expenses like backpacks, sneakers, and clothes. But too often parents don't consider school-related expenses that come after the August crunch, says James Allen, a certified financial planner and financial education instructor.
"The most common overlooked costs in a school year are often the ones that sneak up on you," he said. "They're the field trips, the fundraising events, the school photos, the after-school clubs. They might not seem like much on their own, but together, they can pack quite a punch to your budget."
Luckily, Allen and other financial pros say that with a little planning it's easy to create a school year budget that will cover all your expenses. Here's how.
Create a sinking fund for school expenses
It's impossible to predict every expense. If you budget for soccer, your child might decide they want to play an instrument instead or a more expensive sport like hockey.
"It can be hard to budget when you don't know how much you'll need to spend monthly, as a school's needs are unique and change constantly," said Kari Lorz, a certified financial education instructor, mom, and founder at Money for the Mamas.
Rather than try to predict a year's worth of expenses, Lorz suggests a sinking fund. This is money set aside in your savings for a specific purpose—in this case, school-related expenses. Start by putting $40 to $80 per month in this designated savings. Each month, some money will go out for expenses like sports fees, picture days, book fairs, and more, but ideally, the pot will grow over time and cover most of your expenses for the year.
Be aware of more expensive years
Not all school years are created equal. Many parents are shocked by how expensive senior year is, says Lauren Tingley, a teacher and creator of Simply Well Balanced. Senior photos, college visits, prom, and other expenses all add up very quickly.
"Senior year expenses always catch parents off guard and are often more than anticipated," she says.
But you won't have to wait until 12th grade to encounter particularly expensive years. Other milestone years, like 5th or 8th grade, can also be pricey. If your child is heading into a year with lots of social commitments, activities, and school trips, increase your sinking fund contributions to cover the added expenses.
Think beyond the school year
Budgeting for school-related expenses is a great start. But parents should also think about other expenses their kids have. After-school care, particularly if you only use it occasionally, is often forgotten about in the budget.
"Whether your child needs a ride home from practice or needs someone to stay with them until you get off work, you'll need to budget for these additional costs," Tingley said.
While you're planning for the school year, consider your childcare for next summer. You might have budgeted for the cost of day camp, only to discover your child is interested in more expensive sleep-away or sports-focused options.
"Lacking a summer camp budget can shock family finances—particularly for first-time parents who haven't experienced all of the preparation and spending that goes into sending your children to camp," said Michelle Griffith, a senior wealth advisor with Citi.
Budget for gifts and donations too
Once you've nailed down expenses for your children, it's time to think about others, including appreciation gifts for teachers and birthday gifts for classmates.
"One month of spending on birthday gifts alone can easily match the amount spent for back to school," said Griffith.
You can incorporate gifts into your education or school sinking fund or have another sinking fund solely dedicated to presents for others.
If you get through all those expenses and still have a little to spare, consider budgeting for donations to the classroom or PTO.
"Many teachers are spending their own money on engaging curriculum and experiences for your children in schools that don't provide the resources they need," Tingley said. "Even a small donation can make a difference and will be a great way to show your appreciation for their hard work."