Wednesday, August 7, 2013

Back To School Dollar Stretching

According to a new Deloitte survey, parents will spend an average of $428 per child on back-to-school expenses for the 2013 season. That’s a hard sum to swallow for any parent, especially if you've got multiple children in school.
Credit Sesame  expert Tony Wahl has created some strategic shopping tips that take advantage of available discounts that will stretch back to school budgets enormously. 

Here are six shopping and financing tips that can make a big difference:

Tip #1: Save on School Supplies: 
Do not buy your child’s entire list of school supplies in the same store. It’s tempting to go down the list, adding pencils, glue, binders and the like to your shopping cart. Breathe a sigh of relief, and the shopping’s done, right? Right – but you’ve also significantly overpaid for your child’s supplies. Mass retailers and office supply stores will have many school supplies priced as “loss leaders,” such as .25 glue sticks, .20 notebooks, .10 folders. I keep my children’s lists with me, and as I am out and about, I’ll pick up only the items that are at super-low prices for the current week. As the first day of school draws near, I’ll look at the list and see if I need to purchase any other items. Usually, I’ve gotten the majority of the products picked up for the lowest possible prices, freeing up funds to purchase anything else that’s needed.

Tip #2: School Clothes Shopping:
 New school clothes are also on the kids’ minds as we head into August! Before we hit the stores to look for new school clothing, I take stock of what the kids already have and what still fits. Once it’s time to shop, I’ll allow the kids to each choose a new outfit for the first day of school, but I like to hold off buying entire new wardrobes for them for a few weeks. Once they get to school and see what their friends are wearing and what styles are in for the current year, they may have a few special items they’d like to buy. With Labor Day sales around the corner, waiting a few weeks often pays off too, as you can take advantage of clearances and coupons tied to the holiday.

Tip #3: Retailer Credit Cards:
 If you have store-specific retailer credit cards, ask your store if they’re currently running any discounts tied to them. Kohls, Target, and other retailers offer promotions where you’ll receive a percent-off discount when you pay with the store card. If the retailer isn’t running any special promotions, though, you’re better off using a general credit card, like your Visa, Mastercard, AMEX or Discover. Retail cards typically have lower credit limits and high interest rates, and this means your debt-to-credit ratio could negatively impact your credit score.

Keep in mind that stores may offer financial incentives to open a store credit card – cash off your total purchase, or a free product. If you’re currently carrying credit card debt, consider the high interest rates that retailer credit cards typically carry. If you plan to carry a balance on that store card, the “free” $25 you got when you signed up will quickly disappear when you’re paying interest rates as high as 20% or more.
Another factor to remember -- applying for that retailer credit card will almost always lead to a lower credit score.  Saving 10% on $425 of school supplies might seem like a good idea, but trading a “free” $42 for a lower credit score could cost you thousands in added interest down the road if you carry a balance. And, a lower credit score affects you long after you got a discount at the register. A lower credit score can lead to to a more expensive mortgage, refinance, or new purchase in your future. 

Tip #4: Shopping Online:
Your credit card may award you a percentage savings. Through the month of August, Discover card is offering 10% cash back when you shop online at popular retailers, including Macy’s, JC Penney, Kmart, and Foot Locker.  Other online stores, including Carsons, Aeropostale, Old Navy and Gap are offering  5% cash back.  I always look for coupon codes too when shopping online – coupon sites like and keep track of percent-off and free-shipping offers for many online shops.

Tip #5: General Credit Card Rewards: 
 When I shop with credit, I always use a rewards card of some kind – whether I’m getting cash back, hotel points or the like, it’s better than simply paying for items without receiving that bonus. We took a vacation earlier this year, and we enjoyed free hotel-room stays for half our trip because I’d earned enough bonus points for free nights!  I’m a big fan of cash-back credit cards too – when the bill comes at the end of the month, I’ll use my cash-back rewards to help pay the balance of the bill.

Tip #6: Sales Tax Holidays:
 Quite a few states are also having state sales-tax holidays, in which you will not have to pay sales tax for back-to-school supplies, clothing, shoes and electronics.  Check with your state’s department of revenue to determine if your state is offering sales tax holidays.
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